Free Plant Design and Economics MCQs with Answers

• A. Coke breeze
• B. High V.M. bituminous coal
• C. Sand
• D. None of these

Explanation: High-volatile bituminous coal is prone to oxidation and spontaneous heating, so it is stored in enclosed silos with controlled conditions.

• A. 5 metres above ground
• B. 2 metres above the ground
• C. At ground level
• D. 10 metres above ground

Explanation: The vacuum drum is normally placed at ground level, while the barometric condenser is elevated to provide the liquid-leg height needed for…

• A. Ammonia recovery and size of the plant
• B. Ammonia recovery
• C. Carbonating tower
• D. Ammoniation of salt solution

Explanation: The Solvay process recycles ammonia, so efficient ammonia recovery is essential to reduce operating cost.

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

Explanation: A balance sheet is a snapshot of an industrial concern's financial position at a specified date.

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

Explanation: For payments made at each year's end, the present value is the ordinary-annuity formula, R[1 - (1+i)^(-n)]/i.

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

Explanation: Advertising, warehousing, and customer service support the sale and distribution of a product.

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

Explanation: Income taxes are imposed on earnings or income generated by an individual or business.

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

Explanation: Operating profit is profit before financing costs and income taxes, commonly called EBIT.

• A. Same
• B. Less
• C. More
• D. No

Explanation: Shareholders are owners and normally have voting rights in company affairs, whereas debenture holders are creditors with no ordinary…

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

Explanation: Equipment insulation is usually a small percentage of fixed capital investment, commonly only about 1 to 3%.

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

Explanation: Purchased equipment commonly accounts for roughly 20 to 40 percent of fixed capital investment, depending on the type and complexity of…

• A. 4
• B. 13
• C. 22
• D. 34

Explanation: Piping is a major cost item in fluid-processing plants because many process streams require extensive pipe runs, valves, fittings, and…

• A. n
• B. n0.4
• C. n0.6
• D. √n

Explanation: The six-tenths rule expresses cost scaling as \(C_2/C_1=(Q_2/Q_1)^{0.6}\).

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

Explanation: Fixed charges include items such as interest, rent, taxes, insurance, and depreciation, which do not vary directly with production rate.

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

Explanation: At the break-even point, total revenue exactly equals total cost, so there is neither profit nor loss.

• A. 300
• B. 600
• C. 800
• D. 1000

Explanation: Straight-line depreciation is spread evenly over the depreciable amount: (5000 - 1000)/5 = Rs. 800 per year.

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

Explanation: For compound interest, the accumulated amount is P(1+i)^n = 10000(1.10)^5 = approximately Rs. 16,105. Simple interest would give only Rs.

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

Explanation: Large chemical plants usually have a much longer economic life because their high initial investment is spread over greater capacity and…

• A. (P - S)/n
• B. [2 (n - m + 1)/n(n + 1)]. (P - S)
• C. (m/n) (P - S)
• D. 1 - (P/S)1/m

Explanation: In the sum-of-the-years'-digits method, the mth-year depreciation is the remaining life fraction times the depreciable amount…

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

Explanation: For a solid-fluid processing plant, the Lang factor is commonly about 4.3, meaning fixed capital is roughly 4.3 times the delivered cost…