40 TOP CHEMICAL ENGINEERING PLANT ECONOMICS Online Test – Multiple Choice Questions and Answers 1. An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the discrete compound interest depreciation by sinking fund method cash ratio manufacturing cost 2. A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs 300 600 800 1000 3. A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as annuity capital charge factor perpetuity future worth 4. Effluent treatment cost in a chemical plant is categorised as the __________ cost fixed utilities overhead capital 5. Total product cost of a chemical plant does not include the __________ cost market survey depreciation, property tax and insur-rance overhead and utilities operating labour, supervision and supplies 6. A shareholder has __________ say in the affairs of company management compared to a debenture holder more less same No 7. Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method ? Sum of the years digit method Multiple straight line method Sinking fund method Declining balance method 8. Pick out the wrong statement Turn over ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes A cost index is merely a number for a given year showing the cost at that time relative to a certain base year Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary 9. Following the six-tenth factor rule, if a log-log plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to 0.1 0.4 0.6 0.8 10. Which of the following does not come under the sales expenses for a product of a chemical plant ? Customer service Warehousing Advertising Legal fees Loading … Question 1 of 10
