# 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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