Chemical Engineering Plant Design and Economics - Set 05 - ObjectiveBooks

# Practice Test: Question Set - 05

1. Construction expenses are roughly __________ percent of the total direct cost of the plant.
(A) 2
(B) 10
(C) 30
(D) 50

2. The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)
(A) p.i.n.
(B) p(1 + i.n)
(C) p(1 + i)n
(D) p(1 - i.n)

3. For a given fluid, as the pipe diameter increases, the pumping cost
(A) Decreases
(B) Increases
(C) Remains the same
(D) May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian

4. An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the
(A) Manufacturing cost
(B) Depreciation by sinking fund method
(C) Discrete compound interest
(D) Cash ratio

5. '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.
(A) 1 to 5
(B) 10 to 20
(C) 25 to 35
(D) 35 to 45

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
(A) Decreases
(B) Increases
(C) Increases linearly
(D) Remain constant

7. Pick out the wrong statement.
(A) Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth
(B) Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)
(C) Working capital = current assets + current liability
(D) Turn over = opening stock + production closing stock

8. Generally, income taxes are based on the
(A) Total income
(B) Gross earning
(C) Total product cost
(D) Fixed cost

9. Utilities cost in the operation of chemical process plant comes under the
(B) Fixed charges
(C) Direct production cost
(D) General expenses

10. The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.
(A) Cash reserve
(B) Capital
(C) Turnover
(D) Investment

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