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Chemical Engineering :: Chemical Engineering Plant Economics

  1. If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be __________ percent.

  2. A.
    10
    B.
    20
    C.
    >20
    D.
    < 20

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  3. Which of the following is a component of working capital investment ?

  4. A.
    Utilities plants.
    B.
    Maintenance and repair inventory.
    C.
    Process equipments.
    D.
    Depreciation.

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  5. 'Six-tenth factor' rule is used for estimating the

  6. A.
    equipment installation cost.
    B.
    equipment cost by scaling.
    C.
    cost of piping.
    D.
    utilities cost.

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  7. Payback period

  8. A.
    and economic life of a project are the same.
    B.
    is the length of time over which the earnings on a project equals the investment.
    C.
    is affected by the variation in earnings after the recovery of the investment.
    D.
    all (a), (b) and (c).

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  9. In an ordinary chemical plant, electrical installation cost may be about

  10. A.
    10-15% of purchased equipment cost.
    B.
    3-10% of fixed capital investment.
    C.
    either (a) or (b).
    D.
    neither (a) nor (b).

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  11. Pick out the wrong statement.

  12. A.
    Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth.
    B.
    Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt).
    C.
    Working capital = current assets + current liability.
    D.
    Turn over = opening stock + production closing stock.

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  13. Personnel working in the market research group is reponsible for the job of

  14. A.
    equipment selection.
    B.
    product evaluation.
    C.
    equipment design.
    D.
    cost estimation.

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  15. "Break-even point" is the point of intersection of

  16. A.
    fixed cost and total cost.
    B.
    total cost and sales revenue.
    C.
    fixed cost and sales revenue.
    D.
    none of these.

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  17. 'P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for rath year by the sum-of years digit method will be

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  19. Pick out the wrong statement.

  20. A.
    Gross revenue is that total amount of capital received as a result of the sale of goods or service.
    B.
    Net revenue is the total profit remaining after deducting all costs excluding taxes.
    C.
    The ratio of immediately available cash to the total current liabilities is known as the cash ratio.
    D.
    Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval.

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