equipment installation cost.
equipment cost by scaling.
cost of piping.
utilities cost.
✅ The correct answer is option B.
Plant Economics MCQs
Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method ?
Multiple straight line method
Sinking fund method
Declining balance method
Sum of the years digit method
✅ The correct answer is option B.
The economic life of a large chemical process plant as compared to a small chemical plant is
only slightly more
much more
slightly less
almost equal
✅ The correct answer is option B.
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
manufacturing cost.
depreciation by sinking fund method.
discrete compound interest.
cash ratio.
✅ The correct answer is option B.
Nominal and effective interest rates are equal, when the interest is compounded
quarterly
semi-annually
annually
in no case, they are equal
✅ The correct answer is option C.
In a chemical process plant, the total product cost comprises of manufacturing cost and the
general expenses
overhead cost
R & D cost
none of these
✅ The correct answer is option A.
The depreciation during the year ‘n’, in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage ‘N’ to the
initial cost.
book value at the end of (n – 1)th year,
depreciation during the (n – 1)th year.
difference between initial cost and salvage value.
✅ The correct answer is option B.
The ratio of working capital to total capital investment for most chemical plants (except for non-seasonal based products) is in the range of __________ percent.
0.1 to 1
1 to 2
10 to 20
50 to 60
✅ The correct answer is option C.
Purchased cost of equipments for a chemical process plant ranges from __________ percent of the fixed capital investment.
10 to 20
20 to 40
45 to 60
65 to 75
✅ The correct answer is option B.