Chemical Engineering Plant Economics problems
- 1. 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
Correct Answer: cost benefit analysis.
- 2. 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
Correct Answer: 10
- 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
Correct Answer: 13
- 4. 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
Correct Answer: net working capital
- 5. 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
Correct Answer: Assets = capital.
- 6. 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 Discuss
Correct Answer: decreases
- 7. Effluent treatment cost in a chemical plant is categorised as the __________ cost.
Options- A. fixed
- B. overhead
- C. utilities
- D. capital Discuss
Correct Answer: utilities
- 8. 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
Correct Answer: Chemical equipments
- 9. 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
Correct Answer: At break even point, NSR is more than the total production cost
- 10. 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
Correct Answer: Cash reserve.
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