Chemical Engineering Plant Economics

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

  1. Fixed cost and total cost
  2. Total cost and sales revenue
  3. Fixed cost and sales revenue
  4. None of these
Correct answer: (B)
Total cost and sales revenue

2.'Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from

  1. 1.2 to 1.4
  2. 2.5 to 2.7
  3. 4.2 to 4.4
  4. 6.2 to 6.4
Correct answer: (C)
4.2 to 4.4

3.'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 year‟s digit method will be

  1. (P - S)/n
  2. 1 - (P/S)s/m
  3. (m/n) (P - S)
  4. [2 (n - m + 1)/n(n + 1)]. (P - S)
Correct answer: (D)
[2 (n - m + 1)/n(n + 1)]. (P - S)

4.'Six-tenth factor' rule is used for estimating the

  1. Equipment installation cost
  2. Equipment cost by scaling
  3. Cost of piping
  4. Utilities cost
Correct answer: (B)
Equipment cost by scaling

5.'Utilities' in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from _________ percent of the total product cost.

  1. 1 to 5
  2. 10 to 20
  3. 25 to 35
  4. 35 to 45
Correct answer: (B)
10 to 20

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

  1. Net present worth
  2. Pay out period
  3. Discounted cash flow
  4. Rate of return on investment
Correct answer: (B)
Pay out period

7._________ of depreciation calculation accounts for the interest on investment.

  1. Straight line method
  2. Declining balance
  3. Both (A) and (B)
  4. Neither (A) nor (B)
Correct answer: (D)
Neither (A) nor (B)

8._________ of depreciation calculation does not take into account the interest on investments.

  1. Present worth method
  2. Sinking fund method
  3. Sum of the years-digits method
  4. All (A), (B) and (C)
Correct answer: (C)
Sum of the years-digits method

9._________ taxes are based on gross earnings.

  1. Property
  2. Excise
  3. Income
  4. Capital gain
Correct answer: (C)

10.A balance sheet for an industrial concern shows

  1. The financial condition at any given time
  2. Only current assets
  3. Only fixed assets
  4. Only current and fixed assets
Correct answer: (A)
The financial condition at any given time
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