9/6/2019 Chemical Engineering Plant Economics MCQ Questions & Answers | Chemical Engineering Page-4 section-2

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Chemical Engineering Plant Economics MCQ Questions & Answers | Chemical Engineering
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Section 2 (https://www.examveda.com/chemical-engineering/practice-mcq-question-on-chemical-engineering-plant-economics/?section=2)

16. Pick out the wrong statement.

A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of owner's contribution i.e., debt-
equity ratio = total debt/net worth

B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)

C. Working capital = current assets + current liability


D. Turn over = opening stock + production closing stock

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17. Cost of instrumentation in a modern chemical plant ranges from __________ percent of the total plant cost.

A. 5 to 10

B. 20 to 30

C. 40 to 50

D. 60 to 70

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18. Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.

A. Declining balance

B. Straight line

C. Sum of the years digit

D. None of these

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

A. Straight line

B. Sinking fund

C. Present worth

D. Declining balance

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20. 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

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