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  • Question
  • Operating profit of a chemical plant is equal to


  • Options
  • A. profit before interest and tax i.e., net profit + interest + tax
  • B. profit after tax plus depreciation
  • C. net profit + tax
  • D. profit after tax

  • Correct Answer
  • profit before interest and tax i.e., net profit + interest + tax 


  • Chemical Engineering Plant Economics problems


    Search Results


    • 1. Scheduling provides information about the

    • Options
    • A. proper utilisation of machines.
    • B. means to minimise idle time for machines.
    • C. time of completion of job.
    • D. time of starting of job and also about how much work should be completed during a particular period.
    • Discuss
    • 2. 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
    • 3. 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
    • 4. 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
    • 5. 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
    • 6. Which of the following is the costliest material of construction used in pressure vessel construction?

    • Options
    • A. Low alloy steel
    • B. Lead
    • C. Titanium
    • D. High alloy steel
    • Discuss
    • 7. Which of the following is not a component of depreciation cost?

    • Options
    • 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.
    • Discuss
    • 8. __________ method for profitability evaluation of a project does not account for investment cost due to land.

    • Options
    • A. Net present worth
    • B. Pay out period
    • C. Discounted cash flow
    • D. Rate of return on investment
    • Discuss
    • 9. Which of the following relationship is not correct is case of a chemical process plant?

    • Options
    • A. Manufacturing cost = direct product cost + fixed charges + plant overhead costs
    • B. General expenses = administrative expenses + distribution & marketing expenses
    • C. Total product cost = manufacturing cost + general expenses
    • D. Total product cost = direct production cost + plant overhead cost.
    • Discuss
    • 10. In a manufacturing industry, break even point occurs, when the

    • Options
    • A. total annual rate of production equals the assigned value.
    • B. total annual product cost equals the total annual sales.
    • C. annual profit equals the expected value.
    • D. annual sales equals the fixed cost.
    • Discuss


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