Process Engineering Economics and Management

Part A (20 x 2 = 40 Marks)

1. In the sinking fund deposit method the annual uniform payment 'R', when the
principal is 'P' sinking fund interest is 'I' and the period is 'n', is given by ______.
2. Define 'Depletion'
3. Name any four methods of calculating depreciation
4. What is meant by capitalized cost? Where is it used?
5. A storage tank was priced at Rs.5000 in 1982 when the cost index was 460. What is
its value today when the cost index is 800?
6. Define 'Acid Test'
7. List the factors to be considered in the evaluation of capital requirements for a
process plant
8. Explain the term 'Capacity factor'
9. Define : Capitalized earning rate and capitalized pay-out time
10. Discuss incremental costs for economic analysis
11. Explain the terms: benefit cost ratio and profitability index
12. Name the different methods of selecting various alternates
13. What is meant by elasticity of demand?
14. Explain: Consumer surplus
15. What are the different types of business cycles?
16. What is GNP?
17. What is fatigue?
18. Name the different types business cycles
19. What is meant by merit rating?
20. Explain Accident proneness

Part B (5 x 12 = 60 Marks)

21. A process plant has an initial investment of Rs.50 lakhs. The estimated salvage value
is Rs.2 lakhs. It has a life of 8 years. Estimate the book value of the plant after 5
years by (a) Straight line depreciation method (b) Declining balance method and (c)
Sinking fund method with a sinking fund interest rate of 10%.

Or

22. A pump installation costing Rs.2000 has a salvage value of Rs.400. It requires
Rs.200 for its annual maintenance. If the value of the money is 10% and the pump
has a life of 3 years, what is the present worth of service rendered by the pump?
What is the capitalized assuming perpetual operation?

23. Discuss in detail the various components of a balance sheet and the economic ratios
and their significance

Or
24. The annual fixed charges for the plant is Rs.1,00,000 and the variable cost is
Rs.1,40,000 at 70% capacity with a net sales of Rs.2,80,000.

(a) What is the BEP in units of production is the selling price per unit is Rs.40
(b) If the product produced above BEP is dumped abroad at a price 15% more than
the variable cost, what is the new gross profit at 100% capacity?

25. A furnace installation 'A' costs Rs.1.2 lakhs with operating cost at Rs.48,000 per
annum. It has a life of 10 years. The installation 'B' guarantees same performance
with an operating cost of Rs.38,000 with an initial cost of Rs.2.5 lakhs. Salvage value
for both is Rs.10,000. What increase in life would be required for plan 'B' to warrant
its selection if money is worth 10%.

Or

26. The following proposals are under consideration:

Proposal A B C D E

Initial outlay, Rs. 25,000 23,000 12,000 20,000 45,000

Annual cash flow, Rs. 3,000 4,000 2,000 4,000 9,000

Life, years 10 6 7 9 12

Rank these proposals (a) in the order of profitability after payback period, and (b)
Net present value method assuming an interest rate of 10%.

27. Discuss 'Keynesian theory of Income and Employment'.

Or

28. Write short notes on:

(a) BEP (b) Cost analysis, and (c) Multiplier and accelerator

29. Discuss product life-cycle and market segmentation

Or

30. Write short notes on:

(a) Job evaluation
(b) Sale forecasting, and
(c) Scientific selection procedure
 II

Part A (20 x 2 = 40 Marks)

1. State the purpose of money market

2. What is amortization?
3. Define depletion
4. What is equity shares?
5. What is fixed cost?
6. Write the characteristics of long term loans
7. What are variable costs?
8. Write the advantages of balance sheet
9. Profitability index of company X is 1.3 and that of company Y is 1.6. Which company
has economic dependence?
10. Why do you expect the economic balance in a company?
11. Briefly write about cost unit
12. Why is there a transaction demand for money?
13. What is Break even point?
14. What is elasticity of demand?
15. What happens if the nature of spending increases based on accelerator theory?
16. What is span of control?
17. Define job evaluation
18. Draw an organization chart
19. What is scientific management?
20. What are the functions of marketing?

Part B (5 x 12 = 60 Marks)

21. What are the methods of calculating depreciation? Explain any two methods

Or

22. What are the features of Walra's law? Explain its theory based on equilibrium
conditions

23. Explain the important features of balance sheets and its advantages

Or

24. What are the sources of finance? Explain the long term capital requirements of a
company

25. What is internal rate of return method? How is it useful in ranking the project?

Or

26. What are the advantages of cost flow analysis?

27. Explain Keynesien employment theory

Or

28. Draw a break even chart and write the advantages of Break even chart on
managerial decision

29. How will you prevent the accidents in Industry? Explain your answer based on your
Industrial knowledge

Or

30. What are the basic elements of MBO? Explain them in detail.

III

Part A (20 x 2 = 40 Marks)

1. Define value of money

2. What is depletion?
3. State any two methods of depreciation
4. What is amortization?
5. What is variable cost?
6. Define cost indices
7. Define fixed cost
8. What is capacity factor?
9. Define rate of return
10. Define economic balance
11. What is inflation?
12. Define multiple equipment unit
13. Write the expansion of G.N.P
14. What is elasticity of demand?
15. Define B.E.P
16. What is business cycle?
17. What is scientific management?
18. Give any two types of organizations
19. What is job evaluation
20. Define fatigue

Part B (5 x 12 = 60 Marks)

21. Explain any two methods of depreciation

Or
22. Describe the equations for economic studies

23. Explain the long term capital requirement of a company

Or
24. What is balance sheet? Explain its preparation with an example

25. What is present value method? How it is useful in comparing alternatives?

Or
26. Discuss about the cash flow analysis

27. What is demand forecasting? Explain any two methods

Or
28. Discuss about multiplier and accelerator

29. Explain a few advanced techniques in management

Or
30. Explain the recruitment methods adopted in an organization

IV

Part A (20 x 2 = 40 Marks)

1. Give the meaning of the term Inflation

2. What are the effects of deflation?
3. How will you calculate capital recovery factor?
4. Which method of depreciation is permitted by the Income Tax department?
5. What are fixed costs?
6. What are variable costs?
7. What does payback method measure?
8. What is Trial balance?
9. What is discount factor?
10. Define elasticity of demand
11. What are the limitations of breakeven analysis?
12. What are the uses of balance sheet?
13. What is demand forecasting?
14. Explain opportunity cost
15. What is GDP?
16. What is product cycle?
17. Define fatigue
18. Name the training methods
19. List down the remedial measure to avoid accident
20. Who is the father of Scientific management?

Part B (5 x 12 = 60 Marks)

21. A central air-conditioning unit is purchased for Rs.2,50,000 and has an expected life
of 10 years. The salvage for the unit at that time is expected to be Rs.40,000. What
will be the book value at the end of 7 years (use sum of years digits method of
depreciation).

Or

22. (a) Distinguish between Inflation and deflation

 (b) Write a brief note on 'Value of money'

23. Write a brief note on:

(a) Balance sheet
(b) Capital requirements for process plants

Or

24. Distinguish between the following:

(a) Marginal cost and differential cost

(b) Cost allocation and cost apportionment
(c) Operating cost and operation cost
25. Explain any three methods used for evaluating investment proposals.

Or

26. Write a brief note on Economic balance in cyclic operations and multiple equipment
units

27. (a) Discuss the factors that determine the price of elasticity of demand
(b) Describe different phases of business cycle

Or

28. Explain demand forecasting. What are the various methods by which demand can be
forecast?

29. Explain the various methods of job evaluation and its merits and demerits.

Or

30. What are the factors related to accident proneness? Suggest remedial measures.