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Home » Engineering » Chemical Engineering » Chemical Engineering Plant Economics » Section 1

Exercise :: Chemical Engineering Plant Economics - Section 1

1. 

Direct costs component of the fixed capital consists of
A. contingencies
B. onsite and offsite costs
C. labour costs
D. raw material costs

Answer: Option B

Explanation:

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2. 

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: Option A

Explanation:

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3. 

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: Option C

Explanation:

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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: Option C

Explanation:

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5. 

Pick out the wrong statement.
A. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment.
B. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost.
C. Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital investment.
D. In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR).

Answer: Option D

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