Chemical Engineering Plant Economics MCQs with answers Page - 1

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Q. A balance sheet for an industrial concern shows

  • (A) The financial condition at any given time
  • (B) Only current assets
  • (C) Only fixed assets
  • (D) Only current and fixed assets

A

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Q. _______ taxes are based on gross earnings.

  • (A) Property
  • (B) Excise
  • (C) Income
  • (D) Capital gain

A

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Q. _____ 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)

A

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Q. _____ of depreciation calculation accounts for the interest on investment.

  • (A) Straight line method
  • (B) Declining balance
  • (C) Both (A) and (B)
  • (D) Neither (A) nor (B)

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Q. _______ method for profitability evaluation of a project does not account for investment cost due to land.

  • (A) Net present worth
  • (B) Pay out period
  • (C) Discounted cash flow
  • (D) Rate of return on investment

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Q. "Break-even point" is the point of intersection of

  • (A) Fixed cost and total cost
  • (B) Total cost and sales revenue
  • (C) Fixed cost and sales revenue
  • (D) None of these

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Q. 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

A

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Q. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs.

  • (A) 121
  • (B) 110
  • (C) 97
  • (D) 91

A

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Q. A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs.

  • (A) 40096
  • (B) 43196
  • (C) 53196
  • (D) 60196

A

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Q. A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

  • (A) Perpetuity
  • (B) Capital charge factor
  • (C) Annuity
  • (D) Future worth

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