Chemical Engineering Plant Economics(Engineering > Chemical Engineering ) Questions and Answers

Question 1. A shareholder has __________ say in the affairs of company management compared to a debenture holder.
  1.    More
  2.    Less
  3.    Same
  4.    No
Explanation:-
Answer: Option A. -> More
Question 2. 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
  1.    Fabricated equipment and machinery
  2.    Process instruments and control
  3.    Pumps and compressor
  4.    Electrical equipments and material
Explanation:-
Answer: Option A. -> Fabricated equipment and machinery
Question 3. Pick out the wrong statement.
  1.    Gross revenue is that total amount of capital received as a result of the sale of goods or service
  2.    Net revenue is the total profit remaining after deducting all costs excluding taxes
  3.    The ratio of immediately available cash to the total current liabilities is known as the cash ratio
  4.    Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
Explanation:-
Answer: Option B. -> Net revenue is the total profit remaining after deducting all costs excluding taxes
Question 4. A balance sheet for an industrial concern shows
  1.    The financial condition at any given time
  2.    Only current assets
  3.    Only fixed assets
  4.    Only current and fixed assets
Explanation:-
Answer: Option A. -> The financial condition at any given time
Question 5. Effluent treatment cost in a chemical plant is categorised as the __________ cost.
  1.    Fixed
  2.    Overhead
  3.    Utilities
  4.    Capital
Explanation:-
Answer: Option C. -> Utilities
Question 6. Construction expenses are roughly __________ percent of the total direct cost of the plant.
  1.    2
  2.    10
  3.    30
  4.    50
Explanation:-
Answer: Option B. -> 10
Question 7. In financial accounting of a chemical plant, which of the following relationship is invalid?
  1.    Assets = equities
  2.    Assets = liabilities + net worth
  3.    Total income = costs + profits
  4.    Assets = capital
Explanation:-
Answer: Option D. -> Assets = capital
Question 8. Personnel working in the market research group is reponsible for the job of
  1.    Equipment selection
  2.    Product evaluation
  3.    Equipment design
  4.    Cost estimation
Explanation:-
Answer: Option B. -> Product evaluation
Question 9. Payback period
  1.    And economic life of a project are the same
  2.    Is the length of time over which the earnings on a project equals the investment
  3.    Is affected by the variation in earnings after the recovery of the investment
  4.    All of the above
Explanation:-
Answer: Option B. -> Is the length of time over which the earnings on a project equals the investment
Question 10. Pick out the wrong statement.
  1.    Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
  2.    Return on equity = profit after tax/net worth
  3.    Working capital turn over ratio = sales/net working capital
  4.    Total cost of production is more than net sales realisation (NSR) at break even point
Explanation:-
Answer: Option D. -> Total cost of production is more than net sales realisation (NSR) at break even point
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