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- Question
The payback method for the measurement of return on investment
Options- 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.
- Correct Answer
- does not measure the discounted rate of return.
- 1. Payback period
Options- 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). Discuss
- 2. 'Six-tenth factor' rule is used for estimating the
Options- A. equipment installation cost.
- B. equipment cost by scaling.
- C. cost of piping.
- D. utilities cost. Discuss
- 3. 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.
Options- A. 300
- B. 600
- C. 800
- D. 1000 Discuss
- 4. Fixed charges for a chemical plant does not include the
Options- A. interest on borrowed money.
- B. rent of land and buildings.
- C. property tax, insurance and depreciation.
- D. repair and maintenance charges. Discuss
- 5. Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.
Options- A. 5 to 10
- B. 20 to 30
- C. 40 to 50
- D. 60 to 70 Discuss
- 6. The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the
Options- A. initial cost.
- B. book value at the end of (n - 1)th year,
- C. depreciation during the (n - 1)th year.
- D. difference between initial cost and salvage value. Discuss
- 7. Pick out the wrong statement.
Options- 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. Discuss
- 8. Pick out the wrong statement.
Options- 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. Discuss
- 9. The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.
Options- A. one
- B. three
- C. six
- D. twelve Discuss
- 10. Personnel working in the market research group is reponsible for the job of
Options- A. equipment selection.
- B. product evaluation.
- C. equipment design.
- D. cost estimation. Discuss
Chemical Engineering Plant Economics problems
Search Results
Correct Answer: is the length of time over which the earnings on a project equals the investment.
Correct Answer: equipment cost by scaling.
Correct Answer: 800
Correct Answer: repair and maintenance charges.
Correct Answer: 20 to 30
Correct Answer: book value at the end of (n - 1)th year,
Correct Answer: Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary.
Correct Answer: Working capital = current assets + current liability.
Correct Answer: one
Correct Answer: product evaluation.
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