Option A: Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
Option B: Return on equity = profit after tax/net worth
Option C: Working capital turnover ratio = sales/net working capital
Option D: Total cost of production is more than net sales realisation (NSR) at breakeven point
Correct Answer: Total cost of production is more than net sales realisation (NSR) at breakeven point ✔
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Option A: Gross margin = net income – net expenditure
Option B: Net sales realisation (NSR) = Gross sales – selling expenses
Option C: At breakeven point, NSR is more than the total production cost
Option D: Net profit = Gross margin – depreciation – interest
Correct Answer: At breakeven point, NSR is more than the total production cost ✔
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Option A: Difference between income and expense is termed as gross revenue
Option B: Unamortised cost is the difference between the original cost of a property and all the
Option C: Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the
Option D: Scrap value is the net amount of money obtainable from the sale of used property over and
Correct Answer: B. Unamortised cost is the difference between the original cost of a property and all the
depreciation charges made to date ✔
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Option A: The annual depreciation rate for machinery and equipments in a chemical process plant is
Option B: Annual depreciation rate of buildings in a chemical plant is about 3% of its initial cost
Option C: Insurance rates on annual basis in a chemical plant may be about 1% of the fixed capital
Option D: In a chemical industry, research and development cost amounts to about 15% of net sales
Correct Answer: D. In a chemical industry, research and development cost amounts to about 15% of net sales
realisation (NSR) ✔
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Option A: The financial condition at any given time
Option B: Only current assets
Option C: Only fixed assets
Option D: Only current and fixed assets
Correct Answer: The financial condition at any given time ✔
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Option A: Gross revenue is that total amount of capital received as a result of the sale of goods or service
Option B: Net revenue is the total profit remaining after deducting all costs excluding taxes
Option C: The ratio of immediately available cash to the total current liabilities is known as the cash
Option D: Consolidated income statement based on a given time period indicates surplus capital and
Correct Answer: Net revenue is the total profit remaining after deducting all costs excluding taxes ✔
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Option A: R [{(1 + i)n – 1}/ i ]
Option B: R [{(1 + i)n – 1}/ i (1 + i)n]
Option C: R(1 + i)n
Option D: R/(1 + i)n
Correct Answer: B. R [{(1 + i)n – 1}/ i (1 + i)n] ✔
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Option A: Advertising
Option B: Warehousing
Option C: Legal fees
Option D: Customer service
Correct Answer: Legal fees ✔
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Option A: Property
Option B: Excise
Option C: Income
Option D: Capital gain
Correct Answer: Income ✔
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Option A: Profit before interest and tax i.e., net profit + interest + tax
Option B: Profit after tax plus depreciation
Option C: Net profit + tax
Option D: Profit after tax
Correct Answer: Profit before interest and tax i.e., net profit + interest + tax ✔
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Option A: More
Option B: Less
Option C: Same
Option D: No
Correct Answer: More ✔
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Option A: Costs (on annual basis) are constant when the straight line method is used for its
Option B: Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
Option C: Does figure in the calculation of income tax liability on cash flows from an investment
Option D: All A, B. and C.
Correct Answer: D. All A, B. and C. ✔
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Option A: Electrical installation cost
Option B: Equipment installation cost
Option C: Cost for piping
Option D: Equipment insulation cost
Correct Answer: Equipment insulation cost ✔
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Option A: Berl saddles
Option B: Raschig rings
Option C: Pall rings
Option D: Intalox saddles
Correct Answer: Berl saddles ✔
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Option A: 10 to 20
Option B: 20 to 40
Option C: 45 to 60
Option D: 65 to 75
Correct Answer: 20 to 40 ✔
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Option A: 40,096
Option B: 43,196
Option C: 53,196
Option D: 60,196
Correct Answer: 60,196 ✔
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Option A: Interest on borrowed money
Option B: Rent of land and buildings
Option C: Property tax, insurance and depreciation
Option D: Repair and maintenance charges
Correct Answer: Repair and maintenance charges ✔
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Option A: Fixed cost and total cost
Option B: Total cost and sales revenue
Option C: Fixed cost and sales revenue
Option D: None of these
Correct Answer: Total cost and sales revenue ✔
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Option A: 300
Option B: 600
Option C: 800
Option D: 1000
Correct Answer: 800 ✔
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Option A: Diminishing balance
Option B: Straight line
Option C: Sum of the years digit
Option D: Sinking fund
Correct Answer: Diminishing balance ✔
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Option A: 15000
Option B: 16105
Option C: 18105
Option D: 12500
Correct Answer: 16105 ✔
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Option A: Only slightly more
Option B: Much more
Option C: Slightly less
Option D: Almost equal
Correct Answer: Much more ✔
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Option A: (P – S)/n
Option B: 1 – (P/S)1/m
Option C: (m/n) (P – S)
Option D: [2 (n – m + 1)/n(n + 1)]. (P – S)
Correct Answer: D. [2 (n – m + 1)/n(n + 1)]. (P – S) ✔
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Option A: 1.2 to 1.4
Option B: 2.5 to 2.7
Option C: 4.2 to 4.4
Option D: 6.2 to 6.4
Correct Answer: 4.2 to 4.4 ✔
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Option A: p.i.n.
Option B: p(1 + i.n)
Option C: p(1 + i)n
Option D: p(1 – i.n)
Correct Answer: p.i.n. ✔
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Option A: Decreases
Option B: Increases
Option C: Increases linearly
Option D: Remain constant
Correct Answer: Decreases ✔
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Option A: Manufacturing cost
Option B: Depreciation by sinking fund method
Option C: Discrete compound interest
Option D: Cash ratio
Correct Answer: Depreciation by sinking fund method ✔
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Option A: Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of
Option B: Return on investment (ROI) is the ratio of profit before interest & tax and capital employed
Option C: Working capital = current assets + current liability
Option D: Turn over = opening stock + production closing stock
Correct Answer: Working capital = current assets + current liability ✔
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Option A: Plant overhead cost
Option B: Fixed charges
Option C: Direct production cost
Option D: General expenses
Correct Answer: Direct production cost ✔
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Option A: Initial cost
Option B: Book value at the end of (n – 1)th year
Option C: Depreciation during the (n – 1)th year
Option D: Difference between initial cost and salvage value
Correct Answer: B. Book value at the end of (n – 1)th year ✔
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Option A: 10 to 20
Option B: 35 to 45
Option C: 55 to 65
Option D: 70 to 80
Correct Answer: 35 to 45 ✔
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Option A: Competition from other manufactures
Option B: Product distribution
Option C: Opportunities
Option D: Economics
Correct Answer: Economics ✔
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Option A: Net present worth
Option B: Pay out period
Option C: Discounted cash flow
Option D: Rate of return on investment
Correct Answer: Pay out period ✔
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Option A: Low alloy steel
Option B: Lead
Option C: Titanium
Option D: High alloy steel
Correct Answer: Titanium ✔
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Option A: Overhead cost
Option B: Working capital
Option C: Indirect production cost
Option D: Direct production cost
Correct Answer: Working capital ✔
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Option A: 1000 (1 + 0.1/4)20
Option B: 1000 (1 + 0.1)20
Option C: 1000 (1 + 0.1/4)5
Option D: 1000 (1 + 0.1/2)5
Correct Answer: 1000 (1 + 0.1/4)20 ✔
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Option A: Quarterly
Option B: Semi-annually
Option C: Annually
Option D: In no case, they are equal
Correct Answer: Annually ✔
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Option A: Straight line method
Option B: Declining balance
Option C: Both A. and B.
Option D: Neither A. nor B.
Correct Answer: D. Neither A. nor B. ✔
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Option A: Gives a correct picture of profitability
Option B: Underemphasises liquidity
Option C: Does not measure the discounted rate of return
Option D: Takes into account the cash inflows after the recovery of investments
Correct Answer: Does not measure the discounted rate of return ✔
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Option A: Fixed charges
Option B: Plant overheads
Option C: Direct products cost
Option D: Administrative expenses
Correct Answer: Administrative expenses ✔
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Option A: Ageing
Option B: Wear and tear
Option C: Obsolescence
Option D: Breakdown or accident
Correct Answer: Obsolescence ✔
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Option A: Decrease
Option B: Increase
Option C: No change
Option D: None of these
Correct Answer: Decrease ✔
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Option A: Fixed
Option B: Overhead
Option C: Utilities
Option D: Capital
Correct Answer: Utilities ✔
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Option A: Total product cost
Option B: Fixed cost
Option C: Income tax
Option D: None of these
Correct Answer: Total product cost ✔
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Option A: Total annual rate of production equals the assigned value
Option B: Total annual product cost equals the total annual sales
Option C: Annual profit equals the expected value
Option D: Annual sales equals the fixed cost
Correct Answer: Total annual product cost equals the total annual sales ✔
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Option A: 5 to 10
Option B: 20 to 30
Option C: 40 to 50
Option D: 60 to 70
Correct Answer: 20 to 30 ✔
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Option A: Proper utilisation of machines
Option B: Means to minimise idle time for machines
Option C: Time of completion of job
Option D: Time of starting of job and also about how much work should be completed during a
Correct Answer: D. Time of starting of job and also about how much work should be completed during a
particular period ✔
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Option A: Equipment installation cost
Option B: Equipment cost by scaling
Option C: Cost of piping
Option D: Utilities cost
Correct Answer: Equipment cost by scaling ✔
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Option A: p[(1+i)n – 1)]
Option B: p(1 + i)n
Option C: p(1 – i)n
Option D: p(1 + in)
Correct Answer: A. p[(1+i)n – 1)] ✔
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Option A: Assets = equities
Option B: Assets = liabilities + net worth
Option C: Total income = costs + profits
Option D: Assets = capital
Correct Answer: Assets = capital ✔
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Option A: Fabricated equipment and machinery
Option B: Process instruments and control
Option C: Pumps and compressor
Option D: Electrical equipments and material
Correct Answer: Fabricated equipment and machinery ✔
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Option A: Present worth method
Option B: Sinking fund method
Option C: Sum of the years-digits method
Option D: All A, B. and C.
Correct Answer: Sum of the years-digits method ✔
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Option A: 10-15% of purchased equipment cost
Option B: 3-10% of fixed capital investment
Option C: Either A. or B.
Option D: Neither A. nor B.
Correct Answer: C. Either A. or B. ✔
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Option A: Raw materials is stock
Option B: Finished products in stock
Option C: Transportation facilities
Option D: Semi-finished products in the process
Correct Answer: Transportation facilities ✔
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Option A: Equipment selection
Option B: Product evaluation
Option C: Equipment design
Option D: Cost estimation
Correct Answer: Product evaluation ✔
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Option A: Market survey
Option B: Operating labour, supervision and supplies
Option C: Overhead and utilities
Option D: Depreciation, property tax and insurance
Correct Answer: Market survey ✔
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Option A: (1 + i)n/S
Option B: S/(1 + i)n
Option C: S/(1 + in)
Option D: S/(1 + n)i
Correct Answer: S/(1 + i)n ✔
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Option A: Raw materials inventory
Option B: Utilities plants
Option C: Process equipment
Option D: Emergency facilities
Correct Answer: Raw materials inventory ✔
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Option A: 15%
Option B: 10%
Option C: 1.5%
Option D: 150%
Correct Answer: 1.5% ✔
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Option A: Straight line
Option B: Sinking fund
Option C: Present worth
Option D: Declining balance
Correct Answer: Declining balance ✔
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Option A: Declining balance
Option B: Straight line
Option C: Sum of the years digit
Option D: None of these
Correct Answer: Straight line ✔
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Option A: Multiple straight line method
Option B: Sinking fund method
Option C: Declining balance method
Option D: Sum of the years digit method
Correct Answer: Sinking fund method ✔
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Option A: Annually
Option B: Fortnightly
Option C: Monthly
Option D: Half-yearly
Correct Answer: Annually ✔
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Option A: General expenses
Option B: Overhead cost
Option C: R & D cost
Option D: None of these
Correct Answer: General expenses ✔
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Option A: Cash ratio
Option B: Net working capital
Option C: Current ratio
Option D: Liquids assets
Correct Answer: Net working capital ✔
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Option A: Fixed charges and plant overhead cost
Option B: And plant overhead cost
Option C: Plant overhead cost and administrative expenses
Option D: None of these
Correct Answer: Fixed charges and plant overhead cost ✔
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The ratio of gross annual sales to the fixed capital investment is termed as the __________ ratio?
Option A: Cash reserve
Option B: Capital
Option C: Turnover
Option D: Investment
Correct Answer: Turnover ✔
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Option A: Total income
Option B: Gross earning
Option C: Total product cost
Option D: Fixed cost
Correct Answer: Gross earning ✔
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Option A: 1 to 5
Option B: 10 to 20
Option C: 25 to 35
Option D: 35 to 45
Correct Answer: 10 to 20 ✔
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Option A: Decreases
Option B: Increases
Option C: Remains the same
Option D: May increase or decrease, depending upon whether the fluid is Newtonian or non-Newtonian
Correct Answer: Decreases ✔
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Option A: Viscosity of the fluid
Option B: Density of the fluid
Option C: Total cost considerations (pumping cost plus fixed cost of the pipe)
Option D: None of these
Correct Answer: Total cost considerations (pumping cost plus fixed cost of the pipe) ✔
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Option A: 0.1
Option B: 0.6
Option C: 0.2
Option D: 0.8
Correct Answer: 0.6 ✔
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Option A: Product inventory
Option B: In-process inventory
Option C: Minimum cash reserve
Option D: Storage facilities
Correct Answer: Storage facilities ✔
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Option A: Cost benefit analysis
Option B: Floor area availability
Option C: Terminal parameters
Option D: Evaporation capacity required
Correct Answer: Cost benefit analysis ✔
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Option A: 5 years
Option B: 7 years
Option C: 12 years
Option D: 10 years
Correct Answer: 7 years ✔
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Option A: Cash reserve
Option B: Rate of return on investment
Option C: Payout period
Option D: Discounted cash flow based on full life performance
Correct Answer: Cash reserve ✔
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Option A: Thermal
Option B: Nuclear
Option C: Hydroelectric
Option D: Fast breeder reactor
Correct Answer: Hydroelectric ✔
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Option A: Contingencies
Option B: Onsite and offsite costs
Option C: Labour costs
Option D: Raw material costs
Correct Answer: Onsite and offsite costs ✔
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Option A: Repairs and maintenance cost
Option B: Loss due to obsolescence of the equipment
Option C: Loss due to decrease in the demand of product
Option D: Loss due to accident/breakdown in the machinery
Correct Answer: Repairs and maintenance cost ✔
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Option A: And economic life of a project are the same
Option B: Is the length of time over which the earnings on a project equals the investment
Option C: Is affected by the variation in earnings after the recovery of the investment
Option D: All A, B. and C
Correct Answer: Is the length of time over which the earnings on a project equals the investment ✔
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Option A: One
Option B: Three
Option C: Six
Option D: Twelve
Correct Answer: One ✔
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Option A: Value of the asset decreases linearly with time
Option B: Annual cost of depreciation is same every year
Option C: Annual depreciation is the fixed percentage of the property value at the beginning of the
Option D: None of these
Correct Answer: C. Annual depreciation is the fixed percentage of the property value at the beginning of the
particular year ✔
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Option A: 0.1 to 1
Option B: 1 to 2
Option C: 10 to 20
Option D: 50 to 60
Correct Answer: 10 to 20 ✔
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Option A: Perpetuity
Option B: Capital charge factor
Option C: Annuity
Option D: Future worth
Correct Answer: Annuity ✔
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Option A: Inventories
Option B: Marketable securities
Option C: Chemical equipments
Option D: None of these
Correct Answer: Chemical equipments ✔
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