Chemical Engineering Plant Economics problems
- 1. __________ taxes are based on gross earnings.
Options- A. Property
- B. Excise
- C. Income
- D. Capital gain Discuss
Correct Answer: Income
- 2. 'Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from __________ percent of the total product cost.
Options- A. l to 5
- B. 10 to 20
- C. 25 to 35
- D. 35 to 45 Discuss
Correct Answer: 10 to 20
- 3. The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
Options- A. 15%
- B. 10%
- C. 1.5%
- D. 150% Discuss
Correct Answer: 1.5%
- 4. The ratio of working capital to total capital investment for most chemical plants (except for non-seasonal based products) is in the range of __________ percent.
Options- A. 0.1 to 1
- B. 1 to 2
- C. 10 to 20
- D. 50 to 60 Discuss
Correct Answer: 10 to 20
- 5. Construction expenses are roughly __________ percent of the total direct cost of the plant.
Options- A. 2
- B. 10
- C. 30
- D. 50 Discuss
Correct Answer: 10
- 6. Pick out the wrong statement.
Options- A. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment.
- B. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost.
- C. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment.
- D. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR). Discuss
Correct Answer: In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR).
- 7. Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
Options- A. straight line
- B. sinking fund
- C. present worth
- D. declining balance. Discuss
Correct Answer: declining balance.
- 8. The economic life of a large chemical process plant as compared to a small chemical plant is
Options- A. only slightly more
- B. much more
- C. slightly less
- D. almost equal Discuss
Correct Answer: much more
- 9. __________ of depreciation calculation accounts for the interest on investement.
Options- A. Straight line method
- B. Declining balance
- C. both (a) and (b)
- D. neither (a) nor (b). Discuss
Correct Answer: neither (a) nor (b).
- 10. Which of the following is a component of working capital investment?
Options- A. Utilities plants.
- B. Maintenance and repair inventory.
- C. Process equipments.
- D. Depreciation. Discuss
Correct Answer: Maintenance and repair inventory.
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