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 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.

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 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.

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 costx (index value/(index value at original cost was obtained)The most major component of this cost index is

abricated equipment and machinery

lectrical equipments and material

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

iscounted cash flow based on full life performance

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 working capital?

Semi-finished products in the process

Which of the following elements is not included in the scope of market analysis?

Competition from other manufactures

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

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

Is affected by the variation in earnings after the recovery of the investment

And economic life of a project are the same

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

Is affected by the variation in earnings after the recovery of the investment

A balance sheet for an industrial concern shows

The financial condition at any given time

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 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

Which of the following is a component of working capital investment?

Maintenance and repair inventory

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

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 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.

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

depreciation by sinking fund method.

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.

101 + Mcqs in Chemical Engineering Plant Economics in Chemical Engineering Page 1 McqOptions

1.	If an amount is paid at the end of every year for '' years, then the net present value of the annuity at an interest rate of is
A.	(1 +
B.	)
C.	/(1 +
D.	)
Answer» C. /(1 +

Discussion

2.	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.	1000 (1 + 0.1)
Answer» B.

Discussion

3.	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 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

4.	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 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

5.	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 costx (index value/(index value at original cost was obtained)The most major component of this cost index is
A.	abricated equipment and machinery
B.	rocess instruments and control
C.	umps and compressor
D.	lectrical equipments and material
Answer» B. rocess instruments and control

Discussion

6.	Which of the following is the costliest source of getting hydrogen on commercial scale for the manufacture of nitrogeneous fertiliser?
A.	oal gasification
B.	team reforming of naphtha
C.	lectrolysis of water
D.	oke oven gas
Answer» D. oke oven gas

Discussion

7.	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.	years
B.	years
C.	2 years
D.	0 years
Answer» B. years

Discussion

8.	Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant?
A.	ash reserve
B.	ate of return on investment
C.	ayout period
D.	iscounted cash flow based on full life performance
Answer» B. ate of return on investment

Discussion

9.	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

10.	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

11.	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.	1000 (1 + 0.1/4)20
B.	1000 (1 + 0.1)20
C.	1000 (1 + 0.1/4)5
D.	1000 (1 + 0.1/2)5
Answer» B. 1000 (1 + 0.1)20

Discussion

12.	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

13.	Which of the following elements is not included in the scope of market analysis?
A.	Competition from other manufactures
B.	Product distribution
C.	Opportunities
D.	Economics
Answer» E.

Discussion

14.	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

15.	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

16.	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

17.	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 of the above
Answer» C. Is affected by the variation in earnings after the recovery of the investment

Discussion

18.	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

19.	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

20.	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

21.	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

22.	In which of the electric power generation system, the operating cost is minimum?
A.	Thermal
B.	Nuclear
C.	Hydroelectric
D.	Fast breeder reactor
Answer» D. Fast breeder reactor

Discussion

23.	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

24.	Which of the following is a component of working capital investment?
A.	Utilities plants
B.	Maintenance and repair inventory
C.	Process equipments
D.	Depreciation
Answer» C. Process equipments

Discussion

25.	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

26.	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

27.	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

28.	Depreciation is __________ in profit with time.
A.	decrease
B.	increase
C.	no change
D.	none of these
Answer» B. increase

Discussion

29.	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

30.	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 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

31.	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

32.	Expenditure on research and development (R & D) is categorised as the __________ , while making an estimate of the total product cost for a chemical plant.
A.	overhead cost
B.	fixed expenses
C.	general expenses
D.	direct production cost
Answer» D. direct production cost

Discussion

33.	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
A.	manufacturing cost.
B.	depreciation by sinking fund method.
C.	discrete compound interest.
D.	cash ratio.
Answer» C. discrete compound interest.

Discussion

34.	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

35.	Profit is equal to revenue minus
A.	book value
B.	total cost
C.	operating cost
D.	none of these
Answer» C. operating cost

Discussion

36.	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» B. 110

Discussion

37.	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

38.	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

39.	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

40.	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

41.	Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.
A.	10 to 20
B.	20 to 40
C.	45 to 60
D.	65 to 75
Answer» C. 45 to 60

Discussion

42.	Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.
A.	1
B.	5
C.	10
D.	30
Answer» D. 30

Discussion

43.	The value of a property decreases __________ with time in straight line method of determining depreciation.
A.	linearly
B.	non-linearily
C.	exponentially
D.	logarithmically
Answer» B. non-linearily

Discussion

44.	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

45.	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

46.	The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.
A.	cash ratio
B.	net working capital
C.	current ratio
D.	liquids assets
Answer» C. current ratio

Discussion

47.	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

48.	__________ 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 (a), (b) and (c)
Answer» D. all (a), (b) and (c)

Discussion

49.	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» C. n0.4

Discussion

50.	'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
A.	1.2 to 1.4
B.	2.5 to 2.7
C.	4.2 to 4.4
D.	6.2 to 6.4
Answer» D. 6.2 to 6.4

Discussion

Explore topic-wise MCQs in Chemical Engineering.

If an amount is paid at the end of every year for '' years, then the net present value of the annuity at an interest rate of is

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

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 The most major component of this cost index is

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 The most major component of this cost index is

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

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?

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

Depreciation

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

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

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

Which of the following elements is not included in the scope of market analysis?

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

Break-even point is the point of intersection of

Scheduling provides information about the

Payback period

A balance sheet for an industrial concern shows

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

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

In which of the electric power generation system, the operating cost is minimum?

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

Which of the following is a component of working capital investment?

Operating profit of a chemical plant is equal to

Generally, income taxes are based on the

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

Depreciation is __________ in profit with time.

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

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 The most major component of this cost index is$

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 ?

Expenditure on research and development (R & D) is categorised as the __________ , while making an estimate of the total product cost for a chemical plant.

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

Profit is equal to revenue minus

A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs.

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

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

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

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

Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.

Maximum production start up cost for making a chemical plant operational is about __________ percent of the fixed capital cost.

The value of a property decreases __________ with time in straight line method of determining depreciation.

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 ?

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

The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities.

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

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

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.

'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