CHEMICAL ENGINEERING PLANT ECONOMICS QUIZ

Personnel working in the market research group is reponsible for the job of

Equipment design

Cost estimation

Product evaluation

Equipment selection

TRUE ANSWER : ?
YOUR ANSWER : ?

In an ordinary chemical plant, electrical installation cost may be about

10-15% of purchased equipment cost

3-10% of fixed capital investment

Neither A nor B

Either A or B

TRUE ANSWER : ?
YOUR ANSWER : ?

Nominal and effective interest rates are equal, when the interest is compounded

In no case, they are equal

Annually

Semi-annually

Quarterly

TRUE ANSWER : ?
YOUR ANSWER : ?

Factory manufacturing cost is the sum of the direct production cost

None of these

And plant overhead cost

Plant overhead cost and administrative expenses

Fixed charges and plant overhead cost

TRUE ANSWER : ?
YOUR ANSWER : ?

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

Liquids assets

Current ratio

Net working capital

Cash ratio

TRUE ANSWER : ?
YOUR ANSWER : ?

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

Sinking fund method

All of these

Present worth method

Sum of the years-digits method

TRUE ANSWER : ?
YOUR ANSWER : ?

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

Overhead cost

General expenses

Fixed expenses

Direct production cost

TRUE ANSWER : ?
YOUR ANSWER : ?

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

S/(1 + i)n

S/(1 + in)

S/(1 + n)i

(1 + i)n/S

TRUE ANSWER : ?
YOUR ANSWER : ?

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

Assets = equities

Total income = costs + profits

Assets = liabilities + net worth

Assets = capital

TRUE ANSWER : ?
YOUR ANSWER : ?

The payback method for the measurement of return on investment

Does not measure the discounted rate of return

Gives a correct picture of profitability

Underemphasises liquidity

Takes into account the cash inflows after the recovery of investments

TRUE ANSWER : ?
YOUR ANSWER : ?

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