Chemical Engineering Plant Economics Questions MCQs


chemical engineering plant economics Questions

Total Questions : 105

Page 1 of 6 pages
Question 1. A shareholder has __________ say in the affairs of company management compared to a debenture holder.
  1.    More
  2.    Less
  3.    Same
  4.    No
Answer: Option A
Question 2. 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 x (index value/(index value at original cost was obtained)The most major component of this cost index is
  1.    Fabricated equipment and machinery
  2.    Process instruments and control
  3.    Pumps and compressor
  4.    Electrical equipments and material
Answer: Option A
Question 3. Pick out the wrong statement.
  1.    Gross revenue is that total amount of capital received as a result of the sale of goods or service
  2.    Net revenue is the total profit remaining after deducting all costs excluding taxes
  3.    The ratio of immediately available cash to the total current liabilities is known as the cash ratio
  4.    Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
Answer: Option B
Question 4. A balance sheet for an industrial concern shows
  1.    The financial condition at any given time
  2.    Only current assets
  3.    Only fixed assets
  4.    Only current and fixed assets
Answer: Option A
Question 5. Effluent treatment cost in a chemical plant is categorised as the __________ cost.
  1.    Fixed
  2.    Overhead
  3.    Utilities
  4.    Capital
Answer: Option C
Question 6. Construction expenses are roughly __________ percent of the total direct cost of the plant.
  1.    2
  2.    10
  3.    30
  4.    50
Answer: Option B
Question 7. In financial accounting of a chemical plant, which of the following relationship is invalid?
  1.    Assets = equities
  2.    Assets = liabilities + net worth
  3.    Total income = costs + profits
  4.    Assets = capital
Answer: Option D
Question 8. Personnel working in the market research group is reponsible for the job of
  1.    Equipment selection
  2.    Product evaluation
  3.    Equipment design
  4.    Cost estimation
Answer: Option B
Question 9. Payback period
  1.    And economic life of a project are the same
  2.    Is the length of time over which the earnings on a project equals the investment
  3.    Is affected by the variation in earnings after the recovery of the investment
  4.    All of the above
Answer: Option B
Question 10. Pick out the wrong statement.
  1.    Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
  2.    Return on equity = profit after tax/net worth
  3.    Working capital turn over ratio = sales/net working capital
  4.    Total cost of production is more than net sales realisation (NSR) at break even point
Answer: Option D
Question 11. Which of the following is the costliest material of construction used in pressure vessel construction?
  1.    Low alloy steel
  2.    Lead
  3.    Titanium
  4.    High alloy steel
Answer: Option C
Question 12. Gross earning is equal to the total income minus
  1.    Total product cost
  2.    Fixed cost
  3.    Income tax
  4.    None of these
Answer: Option A
Question 13. Scheduling provides information about the
  1.    Proper utilisation of machines
  2.    Means to minimise idle time for machines
  3.    Time of completion of job
  4.    Time of starting of job and also about how much work should be completed during a particular period
Answer: Option D
Question 14. __________ of depreciation calculation accounts for the interest on investement.
  1.    Straight line method
  2.    Declining balance
  3.    Both A and B
  4.    Neither A nor B
Answer: Option D
Question 15. __________ method for profitability evaluation of a project does not account for investment cost due to land.
  1.    Net present worth
  2.    Pay out period
  3.    Discounted cash flow
  4.    Rate of return on investment
Answer: Option B
Question 16. Pick out the wrong statement.
  1.    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
  2.    Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)
  3.    Working capital = current assets + current liability
  4.    Turn over = opening stock + production closing stock
Answer: Option C
Question 17. Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.
  1.    5 to 10
  2.    20 to 30
  3.    40 to 50
  4.    60 to 70
Answer: Option B
Question 18. Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
  1.    Declining balance
  2.    Straight line
  3.    Sum of the years digit
  4.    None of these
Answer: Option B
Question 19. Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
  1.    Straight line
  2.    Sinking fund
  3.    Present worth
  4.    Declining balance
Answer: Option D
Question 20. The payback method for the measurement of return on investment
  1.    Gives a correct picture of profitability
  2.    Underemphasises liquidity
  3.    Does not measure the discounted rate of return
  4.    Takes into account the cash inflows after the recovery of investments
Answer: Option C