Chemical Engineering Economics MCQs - Set 02 - ObjectiveBooks
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Chemical Engineering Economics MCQs - Set 02

Practice Test: Question Set - 02

1. A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as
    (A) Perpetuity
    (B) Capital charge factor
    (C) Annuity
    (D) Future worth

2. A shareholder has __________ say in the affairs of company management compared to a debenture holder.
    (A) More
    (B) Less
    (C) Same
    (D) No

3. 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.
    (A) 0.1 to 1
    (B) 1 to 2
    (C) 10 to 20
    (D) 50 to 60

4. Depreciation
    (A) Costs (on annual basis) are constant when the straight line method is used for its determination
    (B) Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
    (C) Does figure in the calculation of income tax liability on cash flows from an investment
    (D) All (a), (b) and (c)

5. In declining balance method of depreciation calculation, the
    (A) Value of the asset decreases linearly with time
    (B) Annual cost of depreciation is same every year
    (C) Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
    (D) None of these

6. Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it?
    (A) Electrical installation cost
    (B) Equipment installation cost
    (C) Cost for piping
    (D) Equipment insulation cost

7. The inventory of raw materials included in the working capital is usually about __________ month’s supply of raw materials valued at delivery prices.
    (A) One
    (B) Three
    (C) Six
    (D) Twelve

8. Which of the following ceramic packing materials is the costliest of all?
    (A) Berl saddles
    (B) Raschig rings
    (C) Pall rings
    (D) Intalox saddles

9. Payback period
    (A) And economic life of a project are the same
    (B) Is the length of time over which the earnings on a project equals the investment
    (C) Is affected by the variation in earnings after the recovery of the investment
    (D) All (a), (b) and (c)

10. Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.
    (A) 10 to 20
    (B) 20 to 40
    (C) 45 to 60
    (D) 65 to 75

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