CHEMICAL ENGINEERING PLANT ECONOMICS QUIZ

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

Pumps and compressor

Process instruments and control

Electrical equipments and material

Fabricated equipment and machinery

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Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to __________ percent in case of seasonal products manufacturing plant.

75

50

30

95

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The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is

10%

15%

150%

1.5%

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

Capital

Fixed

Utilities

Overhead

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'Lang factor' is defined as the ratio of the capital investment to the delivered cost of major equipments. The value of 'Lang factor' for fixed capital investment, for a solid-fluid processing chemical plant ranges from

6.2 to 6.4

4.2 to 4.4

2.5 to 2.7

1.2 to 1.4

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An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be

1000 (1 + 0.1)20

1000 (1 + 0.1/4)20

1000 (1 + 0.1/4)5

1000 (1 + 0.1/2)5

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The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio.

Investment

Cash reserve

Capital

Turnover

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

Annuity

Perpetuity

Future worth

Capital charge factor

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

Total product cost = direct production cost + plant overhead cost

Manufacturing cost = direct product cost + fixed charges + plant overhead costs

General expenses = administrative expenses + distribution & marketing expenses

Total product cost = manufacturing cost + general expenses

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A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs.

60196

53196

40096

43196

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