‘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____________________?

Related Mcqs:

1. 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

2. 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

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

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

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

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

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

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

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

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

7. 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%

8. 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

9. 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. 0.1
   B. 0.6
   C. 0.2
   D. 0.8

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

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