_Operating profit of a chemical plant is equal to$?

Profit after tax plus depreciation

Profit before interest and tax i.e., net profit + interest + tax

Profit after tax plus depreciation

_Optimum economic pipe diameter for fluid is determined by the$?

Total cost considerations (pumping cost plus fixed cost of the pipe)

_In declining balance method of depreciation calculation, the$?

Value of the asset decreases linearly with time

Annual cost of depreciation is same every year

Annual depreciation is the fixed percentage of the property value at the beginning of the particular year

_A balance sheet for an industrial concern shows$?

The financial condition at any given time

Which of the following is not a component of working capital?$?

Semi-finished products in the process

Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?$?

Discounted cash flow based on full life performance

Which of the following is not a component of depreciation cost?$?

Loss due to obsolescence of the equipment

Loss due to decrease in the demand of product

Loss due to accident/breakdown in the machinery

Costs (on annual basis) are constant when the straight line method is used for its determination

Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time

Does figure in the calculation of income tax liability on cash flows from an investment

Which of the following is not a component of depreciation cost??

Loss due to obsolescence of the equipment

Loss due to decrease in the demand of product

Loss due to accident/breakdown in the machinery

Total product cost of a chemical plant does not include the __________ cost.?

Operating labour, supervision and supplies

Depreciation, property tax and insur-rance

In financial accounting of a chemical plant, which of the following relationship is invalid??

Assets = liabilities + net worth

Scheduling provides information about the?

Means to minimise idle time for machines

Time of starting of job and also about how much work should be completed during a particular period

Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost x (index value/(index value at original cost was obtained)The most major component of this cost index is

Process instruments and control

Fabricated equipment and machinery

Process instruments and control

Electrical equipments and material

Which of the following relationship is not correct is case of a chemical process plant?

Manufacturing cost = direct product cost + fixed charges + plant overhead costs

General expenses = administrative expenses + distribution & marketing expenses

Total product cost = manufacturing cost + general expenses

Total product cost = direct production cost + plant overhead cost

102 + Mcqs in Chemical Engineering Plant Economics in Chemical Engineering Page 2 McqOptions

51.	_ Generally, income taxes are based on the$?
A.	Total income
B.	Gross earning
C.	Total product cost
D.	Fixed cost
Answer» C. Total product cost

Discussion

52.	_ Functional depreciation of an equipment is the measure of decrease in its value due to its$?
A.	Ageing
B.	Wear and tear
C.	Obsolescence
D.	Breakdown or accident
Answer» D. Breakdown or accident

Discussion

53.	_ 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$?
A.	15%
B.	10%
C.	1.5%
D.	150%
Answer» D. 150%

Discussion

54.	_ 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$?
A.	0.1
B.	0.6
C.	0.2
D.	0.8
Answer» C. 0.2

Discussion

55.	_ 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» C. S/(1 + in)

Discussion

56.	_ 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.	‚Äö√ √∂n
Answer» C. N0.4

Discussion

57.	_ In a chemical process plant, the total product cost comprises of manufacturing cost and the$?
A.	General expenses
B.	Overhead cost
C.	R & D cost
D.	None of these
Answer» B. Overhead cost

Discussion

58.	_ Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?$?
A.	Coal gasification
B.	Steam reforming of naphtha
C.	Alectrolysis of water
D.	Coke oven gas
Answer» D. Coke oven gas

Discussion

59.	_Operating profit of a chemical plant is equal to$?
A.	Profit before interest and tax i.e., net profit + interest + tax
B.	Profit after tax plus depreciation
C.	Net profit + tax
D.	Profit after tax
Answer» B. Profit after tax plus depreciation

Discussion

60.	_Cost incurred towards __________ in a chemical plant is a component of the utilities cost.$?
A.	Water supply
B.	Running a control laboratory
C.	Property protection
D.	Medical services
Answer» B. Running a control laboratory

Discussion

61.	_Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs.$?
A.	15000
B.	16105
C.	18105
D.	12500
Answer» C. 18105

Discussion

62.	_Optimum economic pipe diameter for fluid is determined by the$?
A.	Viscosity of the fluid
B.	Density of the fluid
C.	Total cost considerations (pumping cost plus fixed cost of the pipe)
D.	None of these
Answer» D. None of these

Discussion

63.	___________ of depreciation calculation does not take into account the interest on investments.$?
A.	Present worth method
B.	Sinking fund method
C.	Sum of the years-digits method
D.	All of the above
Answer» D. All of the above

Discussion

64.	_'Six-tenth factor' rule is used for estimating the$?
A.	Equipment installation cost
B.	Equipment cost by scaling
C.	Cost of piping
D.	Utilities cost
Answer» C. Cost of piping

Discussion

65.	_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» C. Sum of the years digit

Discussion

66.	_Break-even point is the point of intersection of$?
A.	Fixed cost and total cost
B.	Total cost and sales revenue
C.	Fixed cost and sales revenue
D.	None of these
Answer» C. Fixed cost and sales revenue

Discussion

67.	_Personnel working in the market research group is reponsible for the job of$?
A.	Equipment selection
B.	Product evaluation
C.	Equipment design
D.	Cost estimation
Answer» C. Equipment design

Discussion

68.	_Gross earning is equal to the total income minus$?
A.	Total product cost
B.	Fixed cost
C.	Income tax
D.	None of these
Answer» B. Fixed cost

Discussion

69.	_In declining balance method of depreciation calculation, the$?
A.	Value of the asset decreases linearly with time
B.	Annual cost of depreciation is same every year
C.	Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
D.	None of these
Answer» D. None of these

Discussion

70.	_A balance sheet for an industrial concern shows$?
A.	The financial condition at any given time
B.	Only current assets
C.	Only fixed assets
D.	Only current and fixed assets
Answer» B. Only current assets

Discussion

71.	Which of the following is not a component of working capital?$?
A.	Raw materials is stock
B.	Finished products in stock
C.	Transportation facilities
D.	Semi-finished products in the process
Answer» D. Semi-finished products in the process

Discussion

72.	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» C. 12 years

Discussion

73.	Depreciation is __________ in profit with time.$?
A.	Decrease
B.	Increase
C.	No change
D.	None of these
Answer» B. Increase

Discussion

74.	Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.$?
A.	4
B.	13
C.	22
D.	34
Answer» C. 22

Discussion

75.	Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.$?
A.	30
B.	50
C.	75
D.	95
Answer» C. 75

Discussion

76.	Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?$?
A.	Cash reserve
B.	Rate of return on investment
C.	Payout period
D.	Discounted cash flow based on full life performance
Answer» B. Rate of return on investment

Discussion

77.	'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.$?
A.	1 to 5
B.	10 to 20
C.	25 to 35
D.	35 to 45
Answer» C. 25 to 35

Discussion

78.	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» B. P(1 + i)n

Discussion

79.	Which of the following is not a component of the working capital for a chemical process plant?$?
A.	Product inventory
B.	In-process inventory
C.	Minimum cash reserve
D.	Storage facilities
Answer» E.

Discussion

80.	Which of the following ceramic packing materials is the costliest of all?$?
A.	Berl saddles
B.	Raschig rings
C.	Pall rings
D.	Intalox saddles
Answer» B. Raschig rings

Discussion

81.	Which of the following is not a component of depreciation cost?$?
A.	Repairs and maintenance cost
B.	Loss due to obsolescence of the equipment
C.	Loss due to decrease in the demand of product
D.	Loss due to accident/breakdown in the machinery
Answer» B. Loss due to obsolescence of the equipment

Discussion

82.	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» B. P(1 + i.n)

Discussion

83.	The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.$?
A.	Cash reserve
B.	Capital
C.	Turnover
D.	Investment
Answer» D. Investment

Discussion

84.	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 of the above
Answer» E.

Discussion

85.	The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.?
A.	Cash reserve
B.	Capital
C.	Turnover
D.	Investment
Answer» D. Investment

Discussion

86.	Which of the following is not a component of depreciation cost??
A.	Repairs and maintenance cost
B.	Loss due to obsolescence of the equipment
C.	Loss due to decrease in the demand of product
D.	Loss due to accident/breakdown in the machinery
Answer» B. Loss due to obsolescence of the equipment

Discussion

87.	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» B. P(1 + i.n)

Discussion

88.	Which of the following is not a component of the working capital for a chemical process plant??
A.	Product inventory
B.	In-process inventory
C.	Minimum cash reserve
D.	Storage facilities
Answer» E.

Discussion

89.	Which of the following ceramic packing materials is the costliest of all??
A.	Berl saddles
B.	Raschig rings
C.	Pall rings
D.	Intalox saddles
Answer» B. Raschig rings

Discussion

90.	Total product cost of a chemical plant does not include the __________ cost.?
A.	Market survey
B.	Operating labour, supervision and supplies
C.	Overhead and utilities
D.	Depreciation, property tax and insur-rance
Answer» B. Operating labour, supervision and supplies

Discussion

91.	Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.?
A.	5 to 10
B.	20 to 30
C.	40 to 50
D.	60 to 70
Answer» C. 40 to 50

Discussion

92.	__________ taxes are based on gross earnings.?
A.	Property
B.	Excise
C.	Income
D.	Capital gain
Answer» D. Capital gain

Discussion

93.	In financial accounting of a chemical plant, which of the following relationship is invalid??
A.	Assets = equities
B.	Assets = liabilities + net worth
C.	Total income = costs + profits
D.	Assets = capital
Answer» E.

Discussion

94.	Scheduling provides information about the?
A.	Proper utilisation of machines
B.	Means to minimise idle time for machines
C.	Time of completion of job
D.	Time of starting of job and also about how much work should be completed during a particular period
Answer» E.

Discussion

95.	Which of the following is not a current asset of a chemical company?
A.	Inventories
B.	Marketable securities
C.	Chemical equipments
D.	None of these
Answer» D. None of these

Discussion

96.	Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost x (index value/(index value at original cost was obtained)The most major component of this cost index is
A.	Fabricated equipment and machinery
B.	Process instruments and control
C.	Pumps and compressor
D.	Electrical equipments and material
Answer» B. Process instruments and control

Discussion

97.	Which of the following does not come under the sales expenses for a product of a chemical plant?
A.	Advertising
B.	Warehousing
C.	Legal fees
D.	Customer service
Answer» D. Customer service

Discussion

98.	Which of the following relationship is not correct is case of a chemical process plant?
A.	Manufacturing cost = direct product cost + fixed charges + plant overhead costs
B.	General expenses = administrative expenses + distribution & marketing expenses
C.	Total product cost = manufacturing cost + general expenses
D.	Total product cost = direct production cost + plant overhead cost
Answer» E.

Discussion

99.	Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it?
A.	Electrical installation cost
B.	Equipment installation cost
C.	Cost for piping
D.	Equipment insulation cost
Answer» E.

Discussion

100.	Which of the following is the costliest material of construction used in pressure vessel construction?
A.	Low alloy steel
B.	Lead
C.	Titanium
D.	High alloy steel
Answer» D. High alloy steel

Discussion

Explore topic-wise MCQs in Chemical Engineering.

_ Generally, income taxes are based on the$?

_ Functional depreciation of an equipment is the measure of decrease in its value due to its$?

_ 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$?

_ 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$?

_ 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$?

_ 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.$?

_ In a chemical process plant, the total product cost comprises of manufacturing cost and the$?

_ Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?$?

_Operating profit of a chemical plant is equal to$?

_Cost incurred towards __________ in a chemical plant is a component of the utilities cost.$?

_Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs.$?

_Optimum economic pipe diameter for fluid is determined by the$?

___________ of depreciation calculation does not take into account the interest on investments.$?

_'Six-tenth factor' rule is used for estimating the$?

_Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.$?

_Break-even point is the point of intersection of$?

_Personnel working in the market research group is reponsible for the job of$?

_Gross earning is equal to the total income minus$?

_In declining balance method of depreciation calculation, the$?

_A balance sheet for an industrial concern shows$?

Which of the following is not a component of working capital?$?

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?$?

Depreciation is __________ in profit with time.$?

Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about __________ percent of the fixed capital investment.$?

Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.$?

Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?$?

'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.$?

The amount of compounded interest during 'n' interest periods is$?

Which of the following is not a component of the working capital for a chemical process plant?$?

Which of the following ceramic packing materials is the costliest of all?$?

Which of the following is not a component of depreciation cost?$?

The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)$?

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.$?

Depreciation?

The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.?

Which of the following is not a component of depreciation cost??

The amount of simple interest during 'n' interest period is (where, i = interest rate based on the length of one interest period, p = principal)?

Which of the following is not a component of the working capital for a chemical process plant??

Which of the following ceramic packing materials is the costliest of all??

Total product cost of a chemical plant does not include the __________ cost.?

Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.?

__________ taxes are based on gross earnings.?

In financial accounting of a chemical plant, which of the following relationship is invalid??

Scheduling provides information about the?

Which of the following is not a current asset of a chemical company?

Which of the following does not come under the sales expenses for a product of a chemical plant?

Which of the following relationship is not correct is case of a chemical process plant?

Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it?

Which of the following is the costliest material of construction used in pressure vessel construction?