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 ?

Related Mcqs:

1. 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. 15%
   B. 10%
   C. 1.5%
   D. 150%

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

3. 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. Process instruments and control
   C. Pumps and compressor
   D. Electrical equipments and material

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

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

5. ‘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. 1.2 to 1.4
   B. 2.5 to 2.7
   C. 4.2 to 4.4
   D. 6.2 to 6.4

6. 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)20
   C. 1000 (1 + 0.1/4)5
   D. 1000 (1 + 0.1/2)5

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

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

8. 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. 40,096
   B. 43,196
   C. 53,196
   D. 60,196

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

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

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

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