Roll No

VFSTR - VADLAMUDI
Year Semester Branch Section
Staff Name: P.Vijetha II I FT ALL
Faculty Branch: Chemical Subject: CEPDE MID – III
Date: 31.10.2019 Time: 11.00 – 12.30
Course Name: Btech
AM
I. Answer all questions. Each question carries ONE mark. [10 x 1 = 10]
1. 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.

2. 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

3. Functional depreciation of equipment is the measure of decrease in its value due to its
a) Ageing b) Wear and Tear c) Obsolescence d) breakdown or accident.

4. What is meant by “Depreciation?”

5. What is meant by salvage value?
6. Write the formula for calculating annual depreciation cost using straight line method.
7. List out the methods for profitability evaluation.
8. Which of the following is not a mathematical method for evaluation of profitability of a
chemical process plant?
a) Cash Reserve b) Rate of return on investment
c) Payout period d) Discounted cash flow based on full life performance.
9. Write the formula for payout period (with no interest charge).
10. 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.

II. Answer any two questions. [2 x 5 = 10]

11. Explain the concept of alternative investment with examples.
(OR)
12. The following equation shows the effect of the variables x and y on the total cost for a
particular operation:
11,900
CT = 2.33x + xy + 1.86y + 10.
Determine the values x and y which will give the least total cost.
13. A piece of equipment cost 20000$ when new .the service life is estimated to be 5 years
and the scrap value is 2000$.estimate the depreciation cost and asset value for each and every
year by using sum-of-the-years-digits method.

(OR)

14. An asset with an original cost of 10000 Rs and no salvage value has a depreciation charge
of Rs 2381 during its 2nd year of service when depreciated by the sum –of –the –years –
digits-Method. What is its expected useful service life?

III. Answer any one questions. [1 x 10 = 10]

15. a) In order to make it worthwhile to purchase a new piece of equipment, the annual
depreciation costs for the equipment cannot exceed Rs. 3000 at any time. The original cost of
the equipment is Rs.30,000 and it has zero salvage and scrap value. Determine the length of
service life necessary if the equipment is depreciated.
i) By the sum of the years digits method, and
ii) By the straight line method

(OR)
16. A company must purchase one reactor to be used in an overall operation. Four reactors
have been designed, all of which are equally capable of giving the required service. The
following data apply to the four designs:

Design Design Design Design

1 2 3 4

Fixed capital investment($) 10000 12000 14000 16000

Sum of operating and fixed costs 3000 2800 2350 2100

per year(all other costs are
constant)($)

If the company demands a 15 percent return on any unnecessary investment, which of the
four designs should be accepted?
Questions – CO Correlation Table:

Question Related CO Number

Marks allotted (Question Numbers)
Numbers (Level of Correlation)
Example : CO3 (2)
1 to 10 CO4 (3) Remembering : 4 (4,5,6,7)
Understanding : 6(9,11)
11 to 12 Example : CO4 (3) Application : 5(12)

Example: CO3 (2) Analyzing : 20(1,2,3,8,10,13,15)

13 to 14
Evaluating : 15(14,16)
Example : CO3 (3) Creating : ()
15 to 16
CO4 (3)