Chemical Engineering Plant Economics

51.Nominal and effective interest rates are equal, when the interest is compounded

1. Quarterly
2. Semi-annually
3. Annually
4. In no case, they are equal

52.Operating profit of a chemical plant is equal to

1. Profit before interest and tax i.e., net profit + interest + tax
2. Profit after tax plus depreciation
3. Net profit + tax
4. Profit after tax

53.Optimum economic pipe diameter for fluid is determined by the

1. Viscosity of the fluid
2. Density of the fluid
3. Total cost considerations (pumping cost plus fixed cost of the pipe)
4. None of these

54.Optimum number of effects in a multiple effect evaporator is decided by the

1. Cost benefit analysis
2. Floor area availability
3. Terminal parameters
4. Evaporation capacity required

55.Out of the following, the depreciation calculated by the _________ method is the maximum.

1. Diminishing balance
2. Straight line
3. Sum of the years digit
4. Sinking fund

56.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 (A), (B) and (C)

57.Personnel working in the market research group is responsible for the job of

1. Equipment selection
2. Product evaluation
3. Equipment design
4. Cost estimation

58.Pick out the correct statement.

1. Difference between income and expense is termed as gross revenue
2. Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date
3. Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment
4. Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale

59.Pick out the wrong statement.

1. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment
2. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost
3. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment
4. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)

60.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