chemical engineering plant economics MCQs – Page 4

Practise multiple-choice questions from chemical engineering plant economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

chemical engineering plant economics Mcqs
61. Pick out the wrong statement?
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A. Net profit = Gross margin depreciation interest

B. Net sales realisation (NSR) = Gross sales selling expenses

C. Gross margin = net income net expenditure

D. At breakeven point, NSR is more than the total production cost
62. A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs______________?
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A. 800

B. 600

C. 1000

D. 300

63. If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be ______________ percent ?
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A. 20

B. > 20

C. < 20

D. 10

64. With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project ?
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A. Increases linearly

B. Increases

C. Remain constant

D. Decreases
65. Lang factor is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of Lang factor for fixed capital investment, for a solid-fluid processing chemical plant ranges from ?
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A. 2.5 to 2.7

B. 4.2 to 4.4

C. 1.2 to 1.4

D. 6.2 to 6.4

66. Annual depreciation costs are constant, when the ______________ method of depreciation calculation is used ?
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A. Sum of the years digit

B. Declining balance

C. Straight line

D. None of these

67. Which of the following elements is not included in the scope of market analysis ?
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A. Competition from other manufactures

B. Product distribution

C. Economics

D. Opportunities

68. In financial accounting of a chemical plant, which of the following relationship is invalid ?
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A. Total income = costs + profits

B. Assets = capital

C. Assets = liabilities + net worth

D. Assets = equities

69. Optimum economic pipe diameter for fluid is determined by the___________________?
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A. Total cost considerations (pumping cost plus fixed cost of the pipe)

B. Viscosity of the fluid

C. Density of the fluid

D. None of these

70. Fixed charges for a chemical plant does not include the____________________?
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A. Repair and maintenance charges

B. Property tax, insurance and depreciation

C. Rent of land and buildings

D. Interest on borrowed money

71. Annual depreciation cost are not constant when, the _____________ method of depreciation calculation is used ?
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A. Present worth

B. Straight line

C. Sinking fund

D. Declining balance
72. Equipment installation cost in a chemical process plant ranges from _______________ percent of the purchased equipment cost ?
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A. 35 to 45

B. 55 to 65

C. 10 to 20

D. 70 to 80

73. Purchased cost of equipments for a chemical process plant ranges from _____________ percent of the fixed capital investment?
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A. 20 to 40

B. 45 to 60

C. 65 to 75

D. 10 to 20

74. Relative cost of chemical process plants in India is about ______________ percent more than the similar plants in U.S.A ?
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A. 55

B. 35

C. 75

D. 15

75. ____________ taxes are based on gross earnings ?
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A. Excise

B. Income

C. Capital gain

D. Property

76. Direct costs component of the fixed capital consists of _____________________?
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A. Contingencies

B. Onsite and offsite costs

C. Raw material costs

D. Labour costs

77. Total product cost of a chemical plant does not include the ______________ cost?
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A. Overhead and utilities

B. Operating labour, supervision and supplies

C. Depreciation, property tax and insurance

D. Market survey
78. A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs _____________?
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A. 60,196

B. 43,196

C. 40,096

D. 53,196

79. Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to ______________ percent in case of seasonal products manufacturing plant?
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A. 50

B. 95

C. 75

D. 30

80. The amount of compounded interest during n interest periods is_________________?
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A. p(1 + in)

B. p(1 + i)n

C. p[(1+i)n 1)]

D. p(1 i)n