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11.

The decision by a company management to implement a project is based entirely on

A.	obligation	B.	commitments
C.	economic evaluations	D.	none of the above

12.

Which of the following is a component of working capital investment?

A.	Process equipment	B.	Maintenance and repair inventory
C.	Utilities plants	D.	Depreciation

13.

If the cost of an equipment of the desired capacity is not available it may be estimated from the cost of another equipment using the formula

A.	(cost)1 = (cost)2 [(capacity)2/(capacity)1]	B.	(cost)1 = (cost)2 [(capacity)1/(capacity)2]
C.	(cost)1 = (cost)2 [(capacity)1/(capacity)2]0.6	D.	(cost)1 = (cost)2 [(capacity)2/(capacity)1]0.6

14.

The economic life of a small chemical plant is

A.	usually more than a large chemical plant	B.	usually much more than a large chemical plant
C.	usually much less than a large chemical plant	D.	always equal to a large chemical plant

15.

Select the correct expression

A.	Profit = revenue - operating cost	B.	Profit = revenue - fixed cost
C.	Profit = revenue - total cost	D.	Profit = revenue - book value

16.

At Rs. X per kWh how much will it cost to maintain a temperature of 35?C for 24 hours in a box 0.5 m square on each side if the outside temperature is 20?C and the overall heat transfer coefficient for the box is 0.6 W/(m2 K)

A.	Re. 0.162 x	B.	Re. 0.324 x
C.	Re. 0.054 x	D.	Re. 324 x

17.

Rs. 10000 is invested now at 10% interest per annum on a compound basis. What will be the accumulated sum at the end of 5 years

A.	Rs. 15000	B.	Rs. 16105
C.	Rs. 15105.10	D.	Rs. 17105.10

18.

Total installed cost of a centrifugal pump coupled with drive and capable of developing 1000 ft head at 500 gpm is to be calculated using Rs. 55000 as the cost of a pump of 500 ft head at 1000 gpm. The cost estimation method involves the term capacity which will be taken as (gpm)x (head)y where

A.	x = 1 y = 2	B.	x = 1/2 y = 1
C.	x = 2 y = 1	D.	x = 1 y = 1

19.

Select the correct statement

A.	Payout period is the length of time over which the earnings on a project equal the investment	B.	Payout period is not important for business decision making
C.	Payour period is affected by the variations in earnings after the recovery of the investment	D.	Payout period and the economic life of a project are the same

20.

The payback method for the measurement of return on investment

A.	does not measure the discounted rate of return	B.	takes into account the cash inflows after the recovery of investment
C.	gives a correct picture of profitability	D.	underemphasizes liquidity