Chemical Engineering - Chemical Engineering Plant Economics

Exercise :: Chemical Engineering Plant Economics - Section 1

46. 

Pick out the wrong statement.

A. Longer tubes are less expensive per unit heat transfer area as compared to shorter tubes.
B. A cost index is merely a number for a given year showing the cost at that time relative to a certain base year.
C. Turn over ratio of a chemical plant is the ratio of gross annual sales to the fixed capital investment.
D. Plates with butt welded joints are less expensive compared to lap welded joints, because squaring of plates is not necessary.

Answer: Option D

Explanation:

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47. 

Construction expenses are roughly __________ percent of the total direct cost of the plant.

A. 2
B. 10
C. 30
D. 50

Answer: Option B

Explanation:

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48. 

A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.

A. 300
B. 600
C. 800
D. 1000

Answer: Option C

Explanation:

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49. 

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

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.

Answer: Option A

Explanation:

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50. 

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

A. perpetuity
B. capital charge factor
C. annuity
D. future worth

Answer: Option C

Explanation:

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