Chemical Engineering Plant Economics
The payback method for the measurement of return on investment

Underemphasises liquidity
Does not measure the discounted rate of return
Takes into account the cash inflows after the recovery of investments
Gives a correct picture of profitability

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Chemical Engineering Plant Economics
Depreciation

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

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Chemical Engineering Plant Economics
In declining balance method of depreciation calculation, the

None of these
Value of the asset decreases linearly with time
Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
Annual cost of depreciation is same every year

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