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__________________?

Related Mcqs:

1. 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. 5 years
   B. 7 years
   C. 12 years
   D. 10 years

2. 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
   C. Increases linearly
   D. Remain constant

3. 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

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

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

5. 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

6. 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. 300
   B. 600
   C. 800
   D. 1000

7. 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

8. 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

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

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