Costs (on annual basis) are constant when the straight line method is used for its determination

Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time

Does figure in the calculation of income tax liability on cash flows from an investment

Chemical Engineering Plant Economics MCQ Questions and answers

A

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Q. Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

(A) Multiple straight line method
(B) Sinking fund method
(C) Declining balance method
(D) Sum of the years digit method

A

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Q. Pick out the wrong statement.

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

A

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Q. Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

(A) 1
(B) 5
(C) 10
(D) 30

A

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Q. Fixed charges for a chemical plant does not include the

(A) Interest on borrowed money
(B) Rent of land and buildings
(C) Property tax, insurance and depreciation
(D) Repair and maintenance charges

A

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Q. 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

A

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Q. Functional depreciation of an equipment is the measure of decrease in its value due to its

(A) Wear and tear
(B) Ageing
(C) Breakdown or accident
(D) Obsolescence

A

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Q. The value of a property decreases __________ with time in straight line method of determining depreciation.

(A) Linearly
(B) Non-linearily
(C) Exponentially
(D) Logarithmically

A

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Q. 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

A

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Q. Depreciation

(A) Costs (on annual basis) are constant when the straight line method is used for its determination
(B) Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
(C) Does figure in the calculation of income tax liability on cash flows from an investment
(D) All of the above

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Q. Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?

(A) Coal gasification
(B) Steam reforming of naphtha
(C) Alectrolysis of water
(D) Coke oven gas

Chemical Engineering Plant Economics MCQs with answers Page - 8

Q. Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method?

Q. Pick out the wrong statement.

Q. Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

Q. Fixed charges for a chemical plant does not include the

Q. Which of the following is not a component of working capital?

Q. Functional depreciation of an equipment is the measure of decrease in its value due to its

Q. The value of a property decreases __________ with time in straight line method of determining depreciation.

Q. The economic life of a large chemical process plant as compared to a small chemical plant is

Q. Depreciation

Q. Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?

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