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  1. The payback method for the measurement of return on investment

  2. A.
    gives a correct picture of profitability.
    B.
    underemphasises liquidity.
    C.
    does not measure the discounted rate of return.
    D.
    takes into account the cash inflows after the recovery of investments.

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  3. Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.

  4. A.
    declining balance
    B.
    straight line
    C.
    sum of the years digit
    D.
    none of these

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  5. Cost incurred towards __________ in a chemical plant is a component of the utilities cost.

  6. A.
    water supply
    B.
    running a control laboratory
    C.
    property protection
    D.
    medical services

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  7. Equipment installation cost in a chemical process plant ranges from __________ percent of the purchased equipment cost.

  8. A.
    10 to 20
    B.
    35 to 45
    C.
    55 to 65
    D.
    70 to 80

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  9. Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

  10. A.
    straight line
    B.
    sinking fund
    C.
    present worth
    D.
    declining balance.

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  11. Pick out the wrong statement.

  12. A.
    Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes.
    B.
    A cost index is merely a number for a given year showing the cost at that time relative to a certain base year.
    C.
    Turn over ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment.
    D.
    Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary.

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  13. Construction expenses are roughly __________ percent of the total direct cost of the plant.

  14. A.
    2
    B.
    10
    C.
    30
    D.
    50

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  15. 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.

  16. A.
    300
    B.
    600
    C.
    800
    D.
    1000

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  17. Which of the following is not a component of depreciation cost ?

  18. A.
    Repairs and maintenance cost.
    B.
    Loss due to obsolescence of the equipment.
    C.
    Loss due to decrease in the demand of product.
    D.
    Loss due to accident/breakdown in the machinery.

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  19. A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

  20. A.
    perpetuity
    B.
    capital charge factor
    C.
    annuity
    D.
    future worth

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