Q.1

The total investment in a project is Rs.lakhs and the annual profit is 1.5 lakhs. If the project life isyears, then the simple rate of return on investment is

  • 15%
  • 10%
  • 1.5%
  • 150%
Q.2

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

  • quarterly
  • semi-annually
  • annually
  • in no case, they are equal
Q.3

A machine has an initial value of Rs.service life of 5 years and final salvage value of Rs.The annual depreciation cost by straight line method is Rs.

  • 300
  • 600
  • 800
  • 1000
Q.4

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

  • Repairs and maintenance cost.
  • Loss due to obsolescence of the equipment.
  • Loss due to decrease in the demand of product.
  • Loss due to accident/breakdown in the machinery.
Q.5

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

  • one
  • three
  • six
  • twelve
Q.6

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

  • Low alloy steel
  • Lead
  • Titanium
  • High alloy steel
Q.7

Operating profit of a chemical plant is equal to

  • profit before interest and tax i.e., net profit + interest + tax
  • profit after tax plus depreciation
  • net profit + tax
  • profit after tax
Q.8

In declining balance method of depreciation calculation, the

  • value of the asset decreases linearly with time.
  • annual cost of depreciation is same every year.
  • annual depreciation is the fixed percentage of the property value at the beginning of the particular year.
  • none of these.
Q.9

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

  • Manufacturing cost = direct product cost + fixed charges + plant overhead costs
  • General expenses = administrative expenses + distribution & marketing expenses
  • Total product cost = manufacturing cost + general expenses
  • Total product cost = direct production cost + plant overhead cost.
Q.10

Which of the following is a component of working capital investment ?

  • Utilities plants.
  • Maintenance and repair inventory.
  • Process equipments.
  • Depreciation.
Q.11

'Six-tenth factor' rule is used for estimating the

  • equipment installation cost.
  • equipment cost by scaling.
  • cost of piping.
  • utilities cost.
Q.12

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

  • equipment selection.
  • product evaluation.
  • equipment design.
  • cost estimation.
Q.13

"Break-even point" is the point of intersection of

  • fixed cost and total cost.
  • total cost and sales revenue.
  • fixed cost and sales revenue.
  • none of these.
Q.14

__________ taxes are based on gross earnings.

  • Property
  • Excise
  • Income
  • Capital gain
Q.15

Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.

  • straight line
  • sinking fund
  • present worth
  • declining balance.
Q.16

Which of the following elements is not included in the scope of market analysis ?

  • Competition from other manufactures.
  • Product distribution.
  • Opportunities
  • Economics
Q.17

__________ of depreciation calculation accounts for the interest on investement.

  • Straight line method
  • Declining balance
  • both (a) and (b)
  • neither (a) nor (b).
Q.18

A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as

  • perpetuity
  • capital charge factor
  • annuity
  • future worth
Q.19

Most chemical plants use an initial working capital amounting to 10-of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.

  • 30
  • 50
  • 75
  • 95
Q.20

Fixed charges for a chemical plant does not include the

  • interest on borrowed money.
  • rent of land and buildings.
  • property tax, insurance and depreciation.
  • repair and maintenance charges.
Q.21

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

  • total annual rate of production equals the assigned value.
  • total annual product cost equals the total annual sales.
  • annual profit equals the expected value.
  • annual sales equals the fixed cost.
Q.22

Gross earning is equal to the total income minus

  • total product cost
  • fixed cost
  • income tax
  • none of these
Q.23

For a given fluid, as the pipe diameter increases, the pumping cost

  • decreases.
  • increases.
  • remains the same.
  • may increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian.
Q.24

Payback period

  • and economic life of a project are the same.
  • is the length of time over which the earnings on a project equals the investment.
  • is affected by the variation in earnings after the recovery of the investment.
  • all (a), (b) and (c).
Q.25

Pick out the wrong statement.

  • Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity).
  • Return on equity = profit after tax/net worth.
  • Working capital turn over ratio = sales/net working capital.
  • Total cost of production is more than net sales realisation (NSR) at break even point.
Q.26

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.
Q.27

In which of the electric power generation system, the operating cost is minimum ?

  • Thermal
  • Nuclear
  • Hydroelectric
  • Fast breeder reactor
Q.28

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

  • 10-15% of purchased equipment cost.
  • 3-10% of fixed capital investment.
  • either (a) or (b).
  • neither (a) nor (b).
Q.29

Pick out the wrong statement.

  • Gross revenue is that total amount of capital received as a result of the sale of goods or service.
  • Net revenue is the total profit remaining after deducting all costs excluding taxes.
  • The ratio of immediately available cash to the total current liabilities is known as the cash ratio.
  • 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.
Q.30

Pick out the wrong statement.

  • Gross revenue is that total amount of capital received as a result of the sale of goods or service.
  • Net revenue is the total profit remaining after deducting all costs excluding taxes.
  • The ratio of immediately available cash to the total current liabilities is known as the cash ratio.
  • 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.
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