Financial definitions in plant economics — pick the correct statement Which one of the following statements is correct in the context of cost accounting and asset valuation for process plants?

Introduction / Context:
Chemical engineering plant economics borrows core terms from accounting. Misusing words like revenue, depreciation, unamortised cost, scrap value, and salvage value can lead to incorrect profitability and tax calculations. This question checks precise definitions used in project evaluation and cost tracking.

Given Data / Assumptions:

• We must select the one correct statement.
• Standard industrial accounting terminology applies.

Concept / Approach:
‘‘Unamortised cost’’ (also called book value or undepreciated cost) is the portion of the original capitalized cost that has not yet been recovered via depreciation charges. Therefore it equals original cost minus accumulated depreciation. Gross revenue is not defined as income minus expense; instead, income minus expenses yields profit (e.g., gross profit, operating profit, or net profit depending on what is subtracted). Sum-of-the-years-digits (SYD) is an accelerated depreciation schedule without explicit interest accounting. ‘‘Scrap value’’ usually refers to the gross value of recoverable materials; when netted for removal/sale charges it is often termed ‘‘salvage value.’’

Step-by-Step Solution:

Verification / Alternative check:
Standard cost accounting texts define book value BV at time t as BV = original cost − accumulated depreciation to date. SYD provides a schedule of yearly depreciation fractions that sum to 1 over the life, but is interest-agnostic.

Why Other Options Are Wrong:

Common Pitfalls:
Treating ‘‘scrap’’ and ‘‘salvage’’ as interchangeable. Also, calling any ‘‘income − expense’’ quantity ‘‘revenue’’ instead of ‘‘profit’’ leads to errors in statements.

Final Answer:
Unamortised cost equals the original cost of a property minus all depreciation charges made to date.