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 _____________?

Related Mcqs:

1. 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

2. ‘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)

3. 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

4. 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

5. 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

6. The amount of simple interest during ‘n’ interest period is (where, i = interest rate based on the length of one interest period, p = principal) ?

   A. p.i.n.
   B. p(1 + i.n)
   C. p(1 + i)n
   D. p(1 – i.n)

7. 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

8. Accumulated sum at the end of 5 years, if Rs. 10000 is invested now at 10% interest per annum on a compound basis is Rs ?

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

9. 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%

10. Which of the following methods of depreciation calculations results in book values greater than those obtained with straight line method ?

    A. Multiple straight line method
    B. Sinking fund method
    C. Declining balance method
    D. Sum of the years digit method