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  • Question
  • 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


  • Options
  • A. decreases
  • B. increases
  • C. increases linearly
  • D. remains constant

  • Correct Answer
  • decreases 


  • Chemical Engineering Plant Economics problems


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    • 1. In financial accounting of a chemical plant, which of the following relationship is invalid?

    • Options
    • A. Assets = equities
    • B. Assets = liabilities + net worth
    • C. Total income = costs + profits
    • D. Assets = capital.
    • Discuss
    • 2. The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.

    • Options
    • A. cash ratio
    • B. net working capital
    • C. current ratio
    • D. liquids assets
    • Discuss
    • 3. Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.

    • Options
    • A. 4
    • B. 13
    • C. 22
    • D. 34
    • Discuss
    • 4. Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

    • Options
    • A. 1
    • B. 5
    • C. 10
    • D. 30
    • Discuss
    • 5. Optimum number of effects in a multiple effect evaporator is decided by the

    • Options
    • A. cost benefit analysis.
    • B. floor area availability.
    • C. terminal parameters.
    • D. evaporation capacity required.
    • Discuss
    • 6. Effluent treatment cost in a chemical plant is categorised as the __________ cost.

    • Options
    • A. fixed
    • B. overhead
    • C. utilities
    • D. capital
    • Discuss
    • 7. Which of the following is not a current asset of a chemical company?

    • Options
    • A. Inventories
    • B. Marketable securities
    • C. Chemical equipments
    • D. None of these.
    • Discuss
    • 8. Pick out the wrong statement.

    • Options
    • A. Gross margin = net income - net expenditure
    • B. Net sales realisation (NSR) = Gross sales - selling expenses
    • C. At break even point, NSR is more than the total production cost
    • D. Net profit = Gross margin - depreciation - interest
    • Discuss
    • 9. Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?

    • Options
    • A. Cash reserve.
    • B. Rate of return on investment.
    • C. Payout period.
    • D. Discounted cash flow based on full life performance.
    • Discuss
    • 10. According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with '' times the capacity of the first unit is approximately equal to __________ times the cost of the initial unit.

    • Options
    • A. n
    • B. n0.6
    • C. n0.4
    • D. n
    • Discuss


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