Category: Plant-Economics

A. Gross margin = net income – net expenditure
B. Net sales realisation (NSR) = Gross sales – selling expenses
C. At breakeven point, NSR is more than the total production cost
D. Net profit = Gross margin – depreciation – interest

A. Interest on borrowed money
B. Rent of land and buildings
C. Property tax, insurance and depreciation
D. Repair and maintenance charges

A. Total annual rate of production equals the assigned value
B. Total annual product cost equals the total annual sales
C. Annual profit equals the expected value
D. Annual sales equals the fixed cost

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

A. Product inventory
B. In-process inventory
C. Minimum cash reserve
D. Storage facilities

A. (1 + i)n/S
B. S/(1 + i)n
C. S/(1 + in)
D. S/(1 + n)i

A. 5 to 10
B. 20 to 30
C. 40 to 50
D. 60 to 70

A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of
owner’s contribution i.e., debt-equity ratio = total debt/net worth
B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed
(i.e. net worth + total debt)
C. Working capital = current assets + current liability
D. Turn over = opening stock + production closing stock

A. Total income
B. Gross earning
C. Total product cost
D. Fixed cost

A. Gives a correct picture of profitability
B. Underemphasises liquidity
C. Does not measure the discounted rate of return
D. Takes into account the cash inflows after the recovery of investments