Most Competitive Chemical Engineering MCQs – New Plant-Economics MCQs

Most Competitive Chemical Engineering MCQs – New Plant-Economics MCQs

This post is comprising of latest ” Plant-Economics MCQs – Latest Competitive Chemical Engineering MCQs “. Here you’ll get latest mechanical engineering mcqs for written test, interview with answers. If you want to improve your knowledge regarding mechanical engineering then read these mcqs of Design of Steel Structures.

Latest Chemical Engineering MCQs

By practicing these MCQs of Plant-Economics MCQs – Latest Competitive Chemical Engineering MCQs , an individual for exams performs better than before. This post comprising of mechanical engineering objective questions and answers related to Plant-Economics Mcqs “. As wise people believe “Perfect Practice make a Man Perfect”. It is therefore practice these mcqs of mechanical engineering to approach the success. Tab this page to check “Plant-Economics Mcqs” for the preparation of competitive mcqs, FPSC mcqs, PPSC mcqs, SPSC mcqs, KPPSC mcqs, AJKPSC mcqs, BPSC mcqs, NTS mcqs, PTS mcqs, OTS mcqs, Atomic Energy mcqs, Pak Army mcqs, Pak Navy mcqs, CTS mcqs, ETEA mcqs and others.

Latest Plant-Economics Mcqs

The most occurred mcqs of Plant-Economics in past papers. Past papers of Plant-Economics Mcqs. Past papers of Plant-Economics Mcqs . Mcqs are the necessary part of any competitive / job related exams. The Mcqs having specific numbers in any written test. It is therefore everyone have to learn / remember the related Plant-Economics Mcqs. The Important series of Plant-Economics Mcqs are given below:

Which of the following is not a current asset of a chemical company ?

A. Marketable securities
B. Inventories
C. Chemical equipments
D. None of these

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

A. Capital charge factor
B. Perpetuity
C. Annuity
D. Future worth

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. 1 to 2
B. 0.1 to 1
C. 10 to 20
D. 50 to 60

In declining balance method of depreciation calculation, the _____________________?

A. Annual cost of depreciation is same every year
B. Value of the asset decreases linearly with time
C. Annual depreciation is the fixed percentage of the property value at the beginning of the particular year
D. None of these

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. Six
C. Three
D. Twelve

Payback period____________________?

A. Is affected by the variation in earnings after the recovery of the investment
B. Is the length of time over which the earnings on a project equals the investment
C. And economic life of a project are the same
D. All A, B. and C

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

A. Repairs and maintenance cost
B. Loss due to decrease in the demand of product
C. Loss due to obsolescence of the equipment
D. Loss due to accident/breakdown in the machinery

Direct costs component of the fixed capital consists of _____________________?

A. Labour costs
B. Onsite and offsite costs
C. Contingencies
D. Raw material costs

In which of the electric power generation system, the operating cost is minimum ?

A. Nuclear
B. Thermal
C. Hydroelectric
D. Fast breeder reactor

Which of the following is not a mathematical method for evaluation of profitability of a chemical process plant ?

A. Cash reserve
B. Payout period
C. Rate of return on investment
D. Discounted cash flow based on full life performance

An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time ?

A. 12 years
B. 7 years
C. 5 years
D. 10 years

Optimum number of effects in a multiple effect evaporator is decided by the____________________?

A. Cost benefit analysis
B. Terminal parameters
C. Floor area availability
D. Evaporation capacity required

Which of the following is not a component of the working capital for a chemical process plant ?

A. In-process inventory
B. Product inventory
C. Minimum cash reserve
D. Storage facilities

Fluid Mechanics Mcqs

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. 0.2
B. 0.6
C. 0.1
D. 0.8

Optimum economic pipe diameter for fluid is determined by the___________________?

A. Density of the fluid
B. Viscosity of the fluid
C. Total cost considerations (pumping cost plus fixed cost of the pipe)
D. None of these

Construction expenses are roughly _____________ percent of the total direct cost of the plant ?

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

For a given fluid, as the pipe diameter increases, the pumping cost ______________________?

A. Decreases
B. Remains the same
C. Increases
D. May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian

‘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. 25 to 35
B. 10 to 20
C. 1 to 5
D. 35 to 45

Generally, income taxes are based on the____________________?

A. Fixed cost
B. Gross earning
C. Total product cost
D. Total income

The ratio of gross annual sales to the fixed capital investment is termed as the ________________ ratio?

A. Cash reserve
B. Investment
C. Turnover
D. Capital

Relative cost of chemical process plants in India is about ______________ percent more than the similar plants in U.S.A ?

A. 55
B. 35
C. 15
D. 75

Factory manufacturing cost is the sum of the direct production cost_________________?

A. Fixed charges and plant overhead cost
B. Plant overhead cost and administrative expenses
C. And plant overhead cost
D. None of these

The ______________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities ?

A. Current ratio
B. Net working capital
C. Cash ratio
D. Liquids assets

In a chemical process plant, the total product cost comprises of manufacturing cost and the__________________?

A. General expenses
B. R & D cost
C. Overhead cost
D. None of these

Effective and nominal interest rates are equal, when the interest is compounded__________________?

A. Annually
B. Monthly
C. Fortnightly
D. Half-yearly

Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method ?

A. Declining balance method
B. Sinking fund method
C. Multiple straight line method
D. Sum of the years digit method

A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?

A. 121
B. 97
C. 110
D. 91

Annual depreciation costs are constant, when the ______________ method of depreciation calculation is used ?

A. Sum of the years digit
B. Straight line
C. Declining balance
D. None of these

Annual depreciation cost are not constant when, the _____________ method of depreciation calculation is used ?

A. Sinking fund
B. Straight line
C. Present worth
D. Declining balance

Nuclear Power Engineering Mcqs

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. 10%
B. 15%
C. 1.5%
D. 150%

Which of the following is not a component of the fixed capital for a chemical plant facility ?

A. Raw materials inventory
B. Process equipment
C. Utilities plants
D. Emergency facilities

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. S/(1 + in)
B. S/(1 + i)n
C. (1 + i)n/S
D. S/(1 + n)i

Total product cost of a chemical plant does not include the ______________ cost?

A. Market survey
B. Overhead and utilities
C. Operating labour, supervision and supplies
D. Depreciation, property tax and insurance

Personnel working in the market research group is responsible for the job of__________________?

A. Equipment design
B. Product evaluation
C. Equipment selection
D. Cost estimation

Which of the following is not a component of working capital ?

A. Finished products in stock
B. Raw materials is stock
C. Transportation facilities
D. Semi-finished products in the process

In an ordinary chemical plant, electrical installation cost may be about ____________________?

A. 3-10% of fixed capital investment
B. 10-15% of purchased equipment cost
C. Either A. or B.
D. Neither A. nor B.

________________ of depreciation calculation does not take into account the interest on investments?

A. Sinking fund method
B. Present worth method
C. Sum of the years-digits method
D. All A, B. and C.

Chemical engineering plant cost index is used for finding the present cost of a particular chemical plant, if the cost of similar plant at some time in the past is known. The present cost of the plant = original cost × (index value at present/ index value at time original cost was obtained). The most major component of this cost index is____________________?

A. Fabricated equipment and machinery
B. Pumps and compressor
C. Process instruments and control
D. Electrical equipments and material

In financial accounting of a chemical plant, which of the following relationship is invalid ?

A. Assets = liabilities + net worth
B. Assets = equities
C. Total income = costs + profits
D. Assets = capital

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)

‘Six-tenth factor’ rule is used for estimating the_________________?

A. Cost of piping
B. Equipment cost by scaling
C. Equipment installation cost
D. Utilities cost

Scheduling provides information about the_________________?

A. Time of completion of job
B. Means to minimise idle time for machines
C. Proper utilisation of machines
D. Time of starting of job and also about how much work should be completed during a particular period

Cost of instrumentation in a modern chemical plant ranges from _____________________ percent of the total plant cost?

A. 40 to 50
B. 20 to 30
C. 5 to 10
D. 60 to 70

In a manufacturing industry, breakeven point occurs, when the___________________?

A. Annual sales equals the fixed cost
B. Total annual product cost equals the total annual sales
C. Annual profit equals the expected value
D. Total annual rate of production equals the assigned value

Gross earning is equal to the total income minus___________________?

A. Total product cost
B. Income tax
C. Fixed cost
D. None of these

Effluent treatment cost in a chemical plant is categorised as the __________________ cost?

A. Overhead
B. Fixed
C. Utilities
D. Capital

Depreciation is ____________________ in profit with time?

A. Decrease
B. No change
C. Increase
D. None of these

Functional depreciation of an equipment is the measure of decrease in its value due to its _________________?

A. Wear and tear
B. Ageing
C. Obsolescence
D. Breakdown or accident

Manufacturing cost in a chemical company does not include the____________________?

A. Plant overheads
B. Fixed charges
C. Direct products cost
D. Administrative expenses

The payback method for the measurement of return on investment___________________?

A. Underemphasises liquidity
B. Gives a correct picture of profitability
C. Does not measure the discounted rate of return
D. Takes into account the cash inflows after the recovery of investments

_________________ of depreciation calculation accounts for the interest on investment?

A. Declining balance
B. Straight line method
C. Both A. and B.
D. Neither A. nor B.

Nominal and effective interest rates are equal, when the interest is compounded______________?

A. Semi-annually
B. Quarterly
C. Annually
D. In no case, they are equal

An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be ________________?

A. 1000 (1 + 0.1/4)20
B. 1000 (1 + 0.1/4)5
C. 1000 (1 + 0.1)20
D. 1000 (1 + 0.1/2)5

The ‘total capital investment’ for a chemical process plant comprises of the fixed capital investment and the_________________?

A. Direct production cost
B. Working capital
C. Indirect production cost
D. Overhead cost

Which of the following is the costliest material of construction used in pressure vessel construction ?

A. Lead
B. Low alloy steel
C. Titanium
D. High alloy steel

_____________ method for profitability evaluation of a project does not account for investment cost due to land ?

A. Discounted cash flow
B. Pay out period
C. Net present worth
D. Rate of return on investment

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. 75
B. 50
C. 30
D. 95

Which of the following elements is not included in the scope of market analysis ?

A. Competition from other manufactures
B. Opportunities
C. Product distribution
D. Economics

Equipment installation cost in a chemical process plant ranges from _______________ percent of the purchased equipment cost ?

A. 55 to 65
B. 35 to 45
C. 10 to 20
D. 70 to 80

If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be ______________ percent ?

A. 20
B. 10
C. > 20
D. < 20

Materials And Construction Mcqs

The depreciation during the year ‘n’, in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage ‘N’ to the ?

A. Depreciation during the (n – 1)th year
B. Book value at the end of (n – 1)th year
C. Initial cost
D. Difference between initial cost and salvage value

Utilities cost in the operation of chemical process plant comes under the ?

A. Fixed charges
B. Plant overhead cost
C. Direct production cost
D. General expenses

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. Turn over = opening stock + production closing stock
C. Working capital = current assets + current liability
D. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed (i.e. net worth + total debt)

An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the__________________?

A. Cash ratio
B. Depreciation by sinking fund method
C. Discrete compound interest
D. Manufacturing cost

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 linearly
C. Increases
D. Remain constant

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)

‘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. 2.5 to 2.7
B. 1.2 to 1.4
C. 4.2 to 4.4
D. 6.2 to 6.4

‘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. 1 – (P/S)1/m
B. (P – S)/n
C. (m/n) (P – S)
D. [2 (n – m + 1)/n(n + 1)]. (P – S)

The economic life of a large chemical process plant as compared to a small chemical plant is_______________?

A. Slightly less
B. Much more
C. Only slightly more
D. Almost equal

Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs ?

A. 18105
B. 16105
C. 15000
D. 12500

Out of the following, the depreciation calculated by the _____________ method is the maximum?

A. Diminishing balance
B. Sum of the years digit
C. Straight line
D. Sinking fund

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. 600
B. 300
C. 800
D. 1000

“Break-even point” is the point of intersection of_____________________?

A. Fixed cost and sales revenue
B. Total cost and sales revenue
C. Fixed cost and total cost
D. None of these

Fixed charges for a chemical plant does not include the____________________?

A. Rent of land and buildings
B. Interest on borrowed money
C. Property tax, insurance and depreciation
D. Repair and maintenance charges

According to six-tenths-factor rule, if the cost of a given unit at one capacity is known, then the cost of similar unit with ” times the capacity of the first unit is approximately equal to _____________ times the cost of the initial unit?

A. √n
B. n0.6
C. n0.4
D. n

A reactor having a salvage value of Rs. 10000 is estimated to have a service life of 10 years. The annual interest rate is 10%. The original cost of the reactor was Rs. 80000. The book value of the reactor after 5 years using sinking fund depreciation method will be Rs _____________?

A. 43,196
B. 40,096
C. 53,196
D. 60,196

Cost of piping in a fluid processing unit (e.g., distillation) of a chemical process plant is about _____________ percent of the fixed capital investment ?

A. 22
B. 13
C. 4
D. 34

Purchased cost of equipments for a chemical process plant ranges from _____________ percent of the fixed capital investment?

A. 45 to 60
B. 20 to 40
C. 10 to 20
D. 65 to 75

Which of the following ceramic packing materials is the costliest of all ?

A. Berl saddles
B. Pall rings
C. Raschig rings
D. Intalox saddles

Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it ?

A. Equipment installation cost
B. Electrical installation cost
C. Cost for piping
D. Equipment insulation cost


A. Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
B. Costs (on annual basis) are constant when the straight line method is used for its determination
C. Does figure in the calculation of income tax liability on cash flows from an investment
D. All A, B. and C.

A shareholder has ______________ say in the affairs of company management compared to a debenture holder ?

A. More
B. Same
C. Less
D. No

Operating profit of a chemical plant is equal to___________________?

A. Profit before interest and tax i.e., net profit + interest + tax
B. Net profit + tax
C. Profit after tax plus depreciation
D. Profit after tax

____________ taxes are based on gross earnings ?

A. Excise
B. Property
C. Income
D. Capital gain

Which of the following does not come under the sales expenses for a product of a chemical plant ?

A. Warehousing
B. Advertising
C. Legal fees
D. Customer service

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
B. R [{(1 + i)n – 1}/ i (1 + i)n]
C. R [{(1 + i)n – 1}/ i ]
D. R/(1 + i)n

Pick out the wrong statement ?

A. The ratio of immediately available cash to the total current liabilities is known as the cash ratio
B. Net revenue is the total profit remaining after deducting all costs excluding taxes
C. Gross revenue is that total amount of capital received as a result of the sale of goods or service
D. Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval

A balance sheet for an industrial concern shows ___________________?

A. The financial condition at any given time
B. Only fixed assets
C. Only current assets
D. Only current and fixed assets

Pick out the wrong statement ?

A. Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost
B. The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment
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)

Pick out the correct statement ?

A. Difference between income and expense is termed as gross revenue
B. Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date
C. Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale
D. Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment

Pick out the wrong statement?

A. Net profit = Gross margin – depreciation – interest
B. Net sales realisation (NSR) = Gross sales – selling expenses
C. At breakeven point, NSR is more than the total production cost
D. Gross margin = net income – net expenditure

Pick out the wrong statement?

A. Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
B. Working capital turnover ratio = sales/net working capital
C. Return on equity = profit after tax/net worth
D. Total cost of production is more than net sales realisation (NSR) at breakeven point

Most Competitive Chemical Engineering MCQs – New Plant-Economics MCQs

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