Chemical Engineering Plant Economics MCQs - Set 04 - ObjectiveBooks

# Practice Test: Question Set - 04

1. A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.
(A) 300
(B) 600
(C) 800
(D) 1000

2. Optimum number of effects in a multiple effect evaporator is decided by the
(A) Cost benefit analysis
(B) Floor area availability
(C) Terminal parameters
(D) Evaporation capacity required

3. Out of the following, the depreciation calculated by the __________ method is the maximum.
(A) Diminishing balance
(B) Straight line
(C) Sum of the years digit
(D) Sinking fund

4. Which of the following is not a component of the working capital for a chemical process plant?
(A) Product inventory
(B) In-process inventory
(C) Minimum cash reserve
(D) Storage facilities

5. Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs.
(A) 15000
(B) 16105
(C) 18105
(D) 12500

6. Following the six-tenth factor rule, if a log-log plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to
(A) 0.1
(B) 0.6
(C) 0.2
(D) 0.8

7. The economic life of a large chemical process plant as compared to a small chemical plant is
(A) Only slightly more
(B) Much more
(C) Slightly less
(D) Almost equal

8. Optimum economic pipe diameter for fluid is determined by the
(A) Viscosity of the fluid
(B) Density of the fluid
(C) Total cost considerations (pumping cost plus fixed cost of the pipe)
(D) None of these

9. 'P' is the investment made on an equipment, 'S' is its salvage value and 'n is the life of the equipment in years. The depreciation for Rath year by the sum-of year’s digit method will be
(A) (P - S)/n
(B) 1 - (P/S)1/m
(C) (m/n) (P - S)
(D) [2 (n - m + 1)/n(n + 1)]. (P - S)

10. 'Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from
(A) 1.2 to 1.4
(B) 2.5 to 2.7
(C) 4.2 to 4.4
(D) 6.2 to 6.4

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