Chemical Plant Economics Multiple Choice Questions - Set 09 - ObjectiveBooks

Chemical Plant Economics Multiple Choice Questions - Set 09

Practice Test: Question Set - 09

1. Which of the following is not a component of working capital?
    (A) Raw materials is stock
    (B) Finished products in stock
    (C) Transportation facilities
    (D) Semi-finished products in the process

2. Effluent treatment cost in a chemical plant is categorized as the __________ cost.
    (A) Fixed
    (B) Overhead
    (C) Utilities
    (D) Capital

3. In an ordinary chemical plant, electrical installation cost may be about
    (A) 10-15% of purchased equipment cost
    (B) 3-10% of fixed capital investment
    (C) Either (a) or (b)
    (D) Neither (a) nor (b)

4. Depreciation is __________ in profit with time.
    (A) Decrease
    (B) Increase
    (C) No change
    (D) None of these

5. Gross earning is equal to the total income minus
    (A) Total product cost
    (B) Fixed cost
    (C) Income tax
    (D) None of these

6. __________ of depreciation calculation does not take into account the interest on investments.
    (A) Present worth method
    (B) Sinking fund method
    (C) Sum of the years-digits method
    (D) All (a), (b) and (c)

7. In a manufacturing industry, breakeven point occurs, when the
    (A) Total annual rate of production equals the assigned value
    (B) Total annual product cost equals the total annual sales
    (C) Annual profit equals the expected value
    (D) Annual sales equals the fixed cost

8. Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. 

The present cost of the plant = original cost × (index value at present/ index value at time original cost was obtained). The most major component of this cost index is

    (A) Fabricated equipment and machinery
    (B) Process instruments and control
    (C) Pumps and compressor
    (D) Electrical equipments and material

9. 'Six-tenth factor' rule is used for estimating the
    (A) Equipment installation cost
    (B) Equipment cost by scaling
    (C) Cost of piping
    (D) Utilities cost

10. In financial accounting of a chemical plant, which of the following relationship is invalid?
    (A) Assets = equities
    (B) Assets = liabilities + net worth
    (C) Total income = costs + profits
    (D) Assets = capital

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