Chemical Engineering Plant Economics

Question: 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

Answer: Option C

Explanation:

No answer description available for this question.

Question: Direct costs component of the fixed capital consists of
[A].

contingencies

[B].

onsite and offsite costs

[C].

labour costs

[D].

raw material costs

Answer: Option B

Explanation:

No answer description available for this question.

Question: If an amount R is paid at the end of every year for ‘n’ years, then the net present value of the annuity at an interest rate of i is
[A].

[B].

[C].

R(1 + i)n

[D].

R/(1 + i)n

Answer: Option B

Explanation:

No answer description available for this question.

Question: 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

Answer: Option A

Explanation:

No answer description available for this question.

Question: ‘P’ is the investment made on an equipment, ‘S’ is its salvage value and ‘n is the life of the equipment in years. The depreciation for rath year by the sum-of years digit method will be
[A].

[B].

[C].

[D].

Answer: Option D

Explanation:

No answer description available for this question.

Question: An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be
[A].

[B].

1000 (1 + 0.1)20

[C].

[D].

Answer: Option A

Explanation:

No answer description available for this question.

Question: 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

Answer: Option D

Explanation:

No answer description available for this question.

Question: An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the pay back time ?
[A].

5 years

[B].

7 years

[C].

12 years

[D].

10 years

Answer: Option B

Explanation:

No answer description available for this question.

Question: For a typical project, the cumulative cash flow is zero at the
[A].

end of the project life.

[B].

break even point.

[C].

start up.

[D].

end of the design stage.

Answer: Option B

Explanation:

No answer description available for this question.

Question: In a manufacturing industry, break even point occurs, when the
[A].

total annual rate of production equals the assigned value.

[B].

total annual product cost equals the total annual sales.

[C].

annual profit equals the expected value.

[D].

annual sales equals the fixed cost.

Answer: Option B

Explanation:

No answer description available for this question.