MCQOPTIONS
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MCQOPTIONS
This section includes 71 Mcqs, each offering curated multiple-choice questions to sharpen your Chemical Engineering knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
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 ? |
| A. | Decreases |
| B. | Increases |
| C. | Increases linearly |
| D. | Remain constant |
| Answer» B. Increases | |
| 2. |
Which of the following is not a component of the fixed capital for a chemical plant facility ? |
| A. | Raw materials inventory |
| B. | Utilities plants |
| C. | Process equipment |
| D. | Emergency facilities |
| Answer» B. Utilities plants | |
| 3. |
‘Utilities’ in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from _______________ percent of the total product cost? |
| A. | 1 to 5 |
| B. | 10 to 20 |
| C. | 25 to 35 |
| D. | 35 to 45 |
| Answer» C. 25 to 35 | |
| 4. |
Utilities cost in the operation of chemical process plant comes under the ? |
| A. | Plant overhead cost |
| B. | Fixed charges |
| C. | Direct production cost |
| D. | General expenses |
| Answer» D. General expenses | |
| 5. |
Total product cost of a chemical plant does not include the ______________ cost? |
| A. | Market survey |
| B. | Operating labour, supervision and supplies |
| C. | Overhead and utilities |
| D. | Depreciation, property tax and insurance |
| Answer» B. Operating labour, supervision and supplies | |
| 6. |
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__________________? |
| A. | 15% |
| B. | 10% |
| C. | 1.5% |
| D. | 150% |
| Answer» D. 150% | |
| 7. |
The ‘total capital investment’ for a chemical process plant comprises of the fixed capital investment and the_________________? |
| A. | Overhead cost |
| B. | Working capital |
| C. | Indirect production cost |
| D. | Direct production cost |
| Answer» C. Indirect production cost | |
| 8. |
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 ? |
| A. | 0.1 to 1 |
| B. | 1 to 2 |
| C. | 10 to 20 |
| D. | 50 to 60 |
| Answer» D. 50 to 60 | |
| 9. |
The ratio of gross annual sales to the fixed capital investment is termed as the ________________ ratio? |
| A. | Cash reserve |
| B. | Capital |
| C. | Turnover |
| D. | Investment |
| Answer» D. Investment | |
| 10. |
The payback method for the measurement of return on investment___________________? |
| A. | Gives a correct picture of profitability |
| B. | Underemphasises liquidity |
| C. | Does not measure the discounted rate of return |
| D. | Takes into account the cash inflows after the recovery of investments |
| Answer» D. Takes into account the cash inflows after the recovery of investments | |
| 11. |
The ______________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities ? |
| A. | Cash ratio |
| B. | Net working capital |
| C. | Current ratio |
| D. | Liquids assets |
| Answer» C. Current ratio | |
| 12. |
The inventory of raw materials included in the working capital is usually about ______________ month‟s supply of raw materials valued at delivery prices? |
| A. | One |
| B. | Three |
| C. | Six |
| D. | Twelve |
| Answer» B. Three | |
| 13. |
The economic life of a large chemical process plant as compared to a small chemical plant is_______________? |
| A. | Only slightly more |
| B. | Much more |
| C. | Slightly less |
| D. | Almost equal |
| Answer» C. Slightly less | |
| 14. |
The depreciation during the year ‘n’, in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage ‘N’ to the ? |
| A. | Initial cost |
| B. | Book value at the end of (n – 1)th year |
| C. | Depreciation during the (n – 1)th year |
| D. | Difference between initial cost and salvage value |
| Answer» C. Depreciation during the (n – 1)th year | |
| 15. |
The amount of simple interest during ‘n’ interest period is (where, i = interest rate based on the length of one interest period, p = principal) ? |
| A. | p.i.n. |
| B. | p(1 + i.n) |
| C. | p(1 + i)n |
| D. | p(1 – i.n) |
| Answer» B. p(1 + i.n) | |
| 16. |
The amount of compounded interest during ‘n’ interest periods is_________________? |
| A. | p[(1+i)n – 1)] |
| B. | p(1 + i)n |
| C. | p(1 – i)n |
| D. | p(1 + in) |
| Answer» B. p(1 + i)n | |
| 17. |
Scheduling provides information about the_________________? |
| 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 |
| Answer» E. | |
| 18. |
Relative cost of chemical process plants in India is about ______________ percent more than the similar plants in U.S.A ? |
| A. | 15 |
| B. | 35 |
| C. | 55 |
| D. | 75 |
| Answer» C. 55 | |
| 19. |
Purchased cost of equipments for a chemical process plant ranges from _____________ percent of the fixed capital investment? |
| A. | 10 to 20 |
| B. | 20 to 40 |
| C. | 45 to 60 |
| D. | 65 to 75 |
| Answer» C. 45 to 60 | |
| 20. |
Personnel working in the market research group is responsible for the job of__________________? |
| A. | Equipment selection |
| B. | Product evaluation |
| C. | Equipment design |
| D. | Cost estimation |
| Answer» C. Equipment design | |
| 21. |
Payback period____________________? |
| A. | And economic life of a project are the same |
| B. | Is the length of time over which the earnings on a project equals the investment |
| C. | Is affected by the variation in earnings after the recovery of the investment |
| D. | All A, B. and C |
| Answer» C. Is affected by the variation in earnings after the recovery of the investment | |
| 22. |
‘P’ is the investment made on an equipment, ‘S’ is its salvage value and ‘n is the life of the equipment in years. The depreciation for Rath year by the sum-of year‟s digit method will be____________________? |
| A. | (P – S)/n |
| B. | 1 – (P/S)1/m |
| C. | (m/n) (P – S) |
| D. | [2 (n – m + 1)/n(n + 1)]. (P – S) |
| Answer» E. | |
| 23. |
Out of the following, the depreciation calculated by the _____________ method is the maximum? |
| A. | Diminishing balance |
| B. | Straight line |
| C. | Sum of the years digit |
| D. | Sinking fund |
| Answer» B. Straight line | |
| 24. |
Optimum number of effects in a multiple effect evaporator is decided by the____________________? |
| A. | Cost benefit analysis |
| B. | Floor area availability |
| C. | Terminal parameters |
| D. | Evaporation capacity required |
| Answer» B. Floor area availability | |
| 25. |
Optimum economic pipe diameter for fluid is determined by the___________________? |
| A. | Viscosity of the fluid |
| B. | Density of the fluid |
| C. | Total cost considerations (pumping cost plus fixed cost of the pipe) |
| D. | None of these |
| Answer» D. None of these | |
| 26. |
Operating profit of a chemical plant is equal to___________________? |
| 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 |
| Answer» B. Profit after tax plus depreciation | |
| 27. |
________________ of depreciation calculation does not take into account the interest on investments? |
| A. | Present worth method |
| B. | Sinking fund method |
| C. | Sum of the years-digits method |
| D. | All A, B. and C. |
| Answer» D. All A, B. and C. | |
| 28. |
_________________ of depreciation calculation accounts for the interest on investment? |
| A. | Straight line method |
| B. | Declining balance |
| C. | Both A. and B. |
| D. | Neither A. nor B. |
| Answer» E. | |
| 29. |
Nominal and effective interest rates are equal, when the interest is compounded______________? |
| A. | Quarterly |
| B. | Semi-annually |
| C. | Annually |
| D. | In no case, they are equal |
| Answer» D. In no case, they are equal | |
| 30. |
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? |
| A. | 30 |
| B. | 50 |
| C. | 75 |
| D. | 95 |
| Answer» C. 75 | |
| 31. |
_____________ method for profitability evaluation of a project does not account for investment cost due to land ? |
| A. | Net present worth |
| B. | Pay out period |
| C. | Discounted cash flow |
| D. | Rate of return on investment |
| Answer» C. Discounted cash flow | |
| 32. |
Manufacturing cost in a chemical company does not include the____________________? |
| A. | Fixed charges |
| B. | Plant overheads |
| C. | Direct products cost |
| D. | Administrative expenses |
| Answer» E. | |
| 33. |
‘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 ? |
| A. | 1.2 to 1.4 |
| B. | 2.5 to 2.7 |
| C. | 4.2 to 4.4 |
| D. | 6.2 to 6.4 |
| Answer» D. 6.2 to 6.4 | |
| 34. |
In financial accounting of a chemical plant, which of the following relationship is invalid ? |
| A. | Assets = equities |
| B. | Assets = liabilities + net worth |
| C. | Total income = costs + profits |
| D. | Assets = capital |
| Answer» E. | |
| 35. |
In declining balance method of depreciation calculation, the _____________________? |
| A. | Value of the asset decreases linearly with time |
| B. | Annual cost of depreciation is same every year |
| C. | Annual depreciation is the fixed percentage of the property value at the beginning of the particular year |
| D. | None of these |
| Answer» D. None of these | |
| 36. |
In an ordinary chemical plant, electrical installation cost may be about ____________________? |
| A. | 10-15% of purchased equipment cost |
| B. | 3-10% of fixed capital investment |
| C. | Either A. or B. |
| D. | Neither A. nor B. |
| Answer» D. Neither A. nor B. | |
| 37. |
In a manufacturing industry, breakeven point occurs, when the___________________? |
| 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 |
| Answer» C. Annual profit equals the expected value | |
| 38. |
In a chemical process plant, the total product cost comprises of manufacturing cost and the__________________? |
| A. | General expenses |
| B. | Overhead cost |
| C. | R & D cost |
| D. | None of these |
| Answer» B. Overhead cost | |
| 39. |
If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be ______________ percent ? |
| A. | 10 |
| B. | 20 |
| C. | > 20 |
| D. | < 20 |
| Answer» D. < 20 | |
| 40. |
If ‘S’ is the amount available after ‘n’ interest periods for an initial principal ‘P’ with the discrete compound interest rate ‘i’, the present worth is given by__________________? |
| A. | (1 + i)n/S |
| B. | S/(1 + i)n |
| C. | S/(1 + in) |
| D. | S/(1 + n)i |
| Answer» C. S/(1 + in) | |
| 41. |
If an amount R is paid at the end of every year for ‘n’ years, then the net present value of the annuity at an interest rate of i is _________________? |
| A. | R [{(1 + i)n – 1}/ i ] |
| B. | R [{(1 + i)n – 1}/ i (1 + i)n] |
| C. | R(1 + i)n |
| D. | R/(1 + i)n |
| Answer» C. R(1 + i)n | |
| 42. |
Gross earning is equal to the total income minus___________________? |
| A. | Total product cost |
| B. | Fixed cost |
| C. | Income tax |
| D. | None of these |
| Answer» B. Fixed cost | |
| 43. |
Generally, income taxes are based on the____________________? |
| A. | Total income |
| B. | Gross earning |
| C. | Total product cost |
| D. | Fixed cost |
| Answer» C. Total product cost | |
| 44. |
Functional depreciation of an equipment is the measure of decrease in its value due to its _________________? |
| A. | Ageing |
| B. | Wear and tear |
| C. | Obsolescence |
| D. | Breakdown or accident |
| Answer» D. Breakdown or accident | |
| 45. |
For a given fluid, as the pipe diameter increases, the pumping cost ______________________? |
| A. | Decreases |
| B. | Increases |
| C. | Remains the same |
| D. | May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian |
| Answer» B. Increases | |
| 46. |
Following the six-tenth factor rule, if a log-log plot of capacity of the equipment vs. cost of the equipment is made, then a straight line is obtained, whose slope is equal to_________________? |
| A. | 0.1 |
| B. | 0.6 |
| C. | 0.2 |
| D. | 0.8 |
| Answer» C. 0.2 | |
| 47. |
Fixed charges for a chemical plant does not include the____________________? |
| A. | Interest on borrowed money |
| B. | Rent of land and buildings |
| C. | Property tax, insurance and depreciation |
| D. | Repair and maintenance charges |
| Answer» E. | |
| 48. |
Factory manufacturing cost is the sum of the direct production cost_________________? |
| A. | Fixed charges and plant overhead cost |
| B. | And plant overhead cost |
| C. | Plant overhead cost and administrative expenses |
| D. | None of these |
| Answer» B. And plant overhead cost | |
| 49. |
Equipment installation cost in a chemical process plant ranges from _______________ percent of the purchased equipment cost ? |
| A. | 10 to 20 |
| B. | 35 to 45 |
| C. | 55 to 65 |
| D. | 70 to 80 |
| Answer» C. 55 to 65 | |
| 50. |
Effluent treatment cost in a chemical plant is categorised as the __________________ cost? |
| A. | Fixed |
| B. | Overhead |
| C. | Utilities |
| D. | Capital |
| Answer» D. Capital | |