Chemical Engineering Plant Economics

Question: 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 (a), (b) and (c).

Answer: Option D

Explanation:

No answer description available for this question.

Question: Payback period
[A].

and economic life of a project are the same.

[B].

is the length of time over which the earnings on a project equals the investment.

[C].

is affected by the variation in earnings after the recovery of the investment.

[D].

all (a), (b) and (c).

Answer: Option B

Explanation:

No answer description available for this question.

Question: If ‘S’ is the amount available after ‘n’ interest periods for an initial principal ‘P’ with the discrete compound interest rate ‘i’, the present worth is given by
[A].

(1 + i)n/S

[B].

S/(1 + i)n

[C].

S/(1 + in)

[D].

S/(1 + n)i

Answer: Option B

Explanation:

No answer description available for this question.

Question: Effective and nominal interest rates are equal, when the interest is compounded
[A].

annually

[B].

fortnightly

[C].

monthly

[D].

half-yearly

Answer: Option A

Explanation:

No answer description available for this question.

Question: The amount of compounded interest during ‘n’ interest periods is
[A].

p[(1+i)n-1)]

[B].

p(1 + i)n

[C].

p(1 – i)n

[D].

p(1 + in)

Answer: Option A

Explanation:

No answer description available for this question.

Question: With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project
[A].

decreases

[B].

increases

[C].

increases linearly

[D].

remains constant

Answer: Option A

Explanation:

No answer description available for this question.

Question: Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
[A].

declining balance

[B].

straight line

[C].

sum of the years digit

[D].

none of these

Answer: Option B

Explanation:

No answer description available for this question.

Question: The amount of simple interest during ‘n’ interest period is (where, i = interest rate based on the length of one interest period, p = principal)
[A].

p.i.n.

[B].

p(1 + i.n)

[C].

p(1 + i)n

[D].

p(1 – i.n)

Answer: Option A

Explanation:

No answer description available for this question.

Question: Gross earning is equal to the total income minus
[A].

total product cost

[B].

fixed cost

[C].

income tax

[D].

none of these

Answer: Option A

Explanation:

No answer description available for this question.

Question: According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with ” times the capacity of the first unit is approximately equal to __________ times the cost of the initial unit.
[A].

n

[B].

n0.6

[C].

n0.4

[D].

n

Answer: Option B

Explanation:

No answer description available for this question.