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Chemical Engineering :: Chemical Engineering Plant Economics

  1. Direct costs component of the fixed capital consists of

  2. A.
    contingencies
    B.
    onsite and offsite costs
    C.
    labour costs
    D.
    raw material costs

  3. Out of the following, the depreciation calculated by the __________ method is the maximum.

  4. A.
    diminishing balance
    B.
    straight line
    C.
    sum of the years digit
    D.
    sinking fund

  5. The ratio of working capital to total capital investment for most chemical plants (except for non-seasonal based products) is in the range of __________ percent.

  6. A.
    0.1 to 1
    B.
    1 to 2
    C.
    10 to 20
    D.
    50 to 60

  7. Utilities cost in the operation of chemical process plant comes under the

  8. A.
    plant overhead cost
    B.
    fixed charges
    C.
    direct production cost
    D.
    general expenses

  9. Pick out the wrong statement.

  10. 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).

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

  12. A.
    Net present worth
    B.
    Pay out period
    C.
    Discounted cash flow
    D.
    Rate of return on investment

  13. The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is

  14. A.
    15%
    B.
    10%
    C.
    1.5%
    D.
    150%

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

  16. A.
    quarterly
    B.
    semi-annually
    C.
    annually
    D.
    in no case, they are equal

  17. Which of the following elements is not included in the scope of market analysis ?

  18. A.
    Competition from other manufactures.
    B.
    Product distribution.
    C.
    Opportunities
    D.
    Economics

  19. __________ of depreciation calculation accounts for the interest on investement.

  20. A.
    Straight line method
    B.
    Declining balance
    C.
    both (a) and (b)
    D.
    neither (a) nor (b).