Chemical Engineering Design Principles Practice Test - Set 07 - ObjectiveBooks
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Chemical Engineering Design Principles Practice Test - Set 07

Practice Test: Question Set - 07

1. __________ method for profitability evaluation of a project does not account for investment cost due to land.
    (A) Net present worth
    (B) Pay out period
    (C) Discounted cash flow
    (D) Rate of return on investment

2. Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?
    (A) Multiple straight line method
    (B) Sinking fund method
    (C) Declining balance method
    (D) Sum of the years digit method

3. Which of the following is the costliest material of construction used in pressure vessel construction?
    (A) Low alloy steel
    (B) Lead
    (C) Titanium
    (D) High alloy steel

4. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs.
    (A) 121
    (B) 110
    (C) 97
    (D) 91

5. Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
    (A) Declining balance
    (B) Straight line
    (C) Sum of the years digit
    (D) None of these

6. The 'total capital investment' for a chemical process plant comprises of the fixed capital investment and the
    (A) Overhead cost
    (B) Working capital
    (C) Indirect production cost
    (D) Direct production cost

7. Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
    (A) Straight line
    (B) Sinking fund
    (C) Present worth
    (D) Declining balance

8. An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be
    (A) 1000 (1 + 0.1/4)20
    (B) 1000 (1 + 0.1)20
    (C) 1000 (1 + 0.1/4)5
    (D) 1000 (1 + 0.1/2)5

9. 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
    (A) 15%
    (B) 10%
    (C) 1.5%
    (D) 150%

10. Pick out the wrong statement.
    (A) Gross margin = net income - net expenditure
    (B) Net sales realisation (NSR) = Gross sales - selling expenses
    (C) At breakeven point, NSR is more than the total production cost
    (D) Net profit = Gross margin - depreciation - interest

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