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Chemical Engineering Plant Economics Online Exam Quiz

Important questions about Chemical Engineering Plant Economics. Chemical Engineering Plant Economics MCQ questions with answers. Chemical Engineering Plant Economics exam questions and answers for students and interviews.

1. Optimum number of effects in a multiple effect evaporator is decided by the

Options

A : cost benefit analysis.

B : floor area availability.

C : terminal parameters.

D : evaporation capacity required.

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

Options

A : 1

B : 5

C : 10

D : 30

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

Options

A : 4

B : 13

C : 22

D : 34

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

Options

A : cash ratio

B : net working capital

C : current ratio

D : liquids assets

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

Options

A : Assets = equities

B : Assets = liabilities + net worth

C : Total income = costs + profits

D : Assets = capital.

6. With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project

Options

A : decreases

B : increases

C : increases linearly

D : remains constant

7. Effluent treatment cost in a chemical plant is categorised as the __________ cost.

Options

A : fixed

B : overhead

C : utilities

D : capital

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

Options

A : Inventories

B : Marketable securities

C : Chemical equipments

D : None of these.

9. Pick out the wrong statement.

Options

A : Gross margin = net income - net expenditure

B : Net sales realisation (NSR) = Gross sales - selling expenses

C : At break even point, NSR is more than the total production cost

D : Net profit = Gross margin - depreciation - interest

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

Options

A : Cash reserve.

B : Rate of return on investment.

C : Payout period.

D : Discounted cash flow based on full life performance.

1. Pick out the wrong statement.

Options

A : Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-equity ratio = total debt/net worth.

B : Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt).

C : Working capital = current assets + current liability.

D : Turn over = opening stock + production closing stock.

2. The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.

Options

A : one

B : three

C : six

D : twelve

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

Options

A : equipment selection.

B : product evaluation.

C : equipment design.

D : cost estimation.

4. Scheduling provides information about the

Options

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.

5. Operating profit of a chemical plant is equal to

Options

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

6. Which of the following is the costliest material of construction used in pressure vessel construction?

Options

A : Low alloy steel

B : Lead

C : Titanium

D : High alloy steel

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

Options

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.

8. __________ method for profitability evaluation of a project does not account for investment cost due to land.

Options

A : Net present worth

B : Pay out period

C : Discounted cash flow

D : Rate of return on investment

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

Options

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.

10. In a manufacturing industry, break even point occurs, when the

Options

A : total annual rate of production equals the assigned value.

B : total annual product cost equals the total annual sales.

C : annual profit equals the expected value.

D : annual sales equals the fixed cost.

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