Mine Economics MCQs Questions & Answers

21

Sum of the years digit method is used for

A) Salting B) Speculative rate of return C) Depreciation D) Ore reserve calculation

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Answer & Solution

Answer: Option C

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22

Payback period is the time required

A) For the cash income from a project to get back the initial cash investment B) From the start of the project to the time to recover the total initial investment C) From the start of the projeet to the start of the production D) To the period during which internal tate of return is generated

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Answer & Solution

Answer: Option B

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23

A bank lends a mine owner Rs. 1,00,000 today to purchase hand-held drills. If a note of agreement is signed to pay the bank Rs. 1,76,234 at the end of 5 years, the rate of interest in percent compounded yearly on the loan becomes

A) 6 B) 8 C) 10 D) 12

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Answer & Solution

Answer: Option D

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24

An O.C. mine requires 16 blocks of overburden of 3000 te each to mine 4 blocks of coal of 2000 te each. The mining cost of both overburden and coal is Rs. 50 per tonne. The cost of transportation of overburden to dump areas is Rs. 50 per tonne. Coal transportation cost to the selling point is Rs. 75 per tonne. The price of coal is Rs. 800 per tonne, If the royalty and tax to the state is Rs. 50 per tonne, the nominal profit in rupees is

A) 2,00,000 B) 20,00,000 C) 30,00,000 D) 50,00,000

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Answer & Solution

Answer: Option A

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25

The cash flow table of a manganese mine for a particular year is shown below:

Item Amount	(Rs. in lakhs)
Revenue	900
Cost (other than depreciation)	300
Depreciation	100
Profit before tax	500

If the corporate tax is 50% of the profit before tax, operating cash inflow in lakhs of rupees is

A) 400 B) 350 C) 250 D) 200

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Answer & Solution

Answer: Option B

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26

The net present value in Rs. of a 3 year annuity of Rs. 10,000 discounted at 10% is

A) 9,091 B) 17,355 C) 24,869 D) 26,446

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Answer & Solution

Answer: Option C

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27

The total cost C (Iakh rupees) of a longwall face of length L in m is given by the equation C = 0.1L+ (1562.5/L) + 300. Length of the face in m for the minimum total cost is

A) 40 B) 125 C) 156 D) 300

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Answer & Solution

Answer: Option B

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28

For a mine production t per year, the total cost of production is given by (at² + b). The revenue from sale is given by ct. If a, b and c, are constants, the breakeven value of t is

A) $$\frac{{\left[ {c \pm \sqrt {\left( {{c^2} - 4ab} \right)} } \right]}}{{\left( {2a} \right)}}$$ B) $$\frac{{\left[ {\sqrt {\left( {{c^2} - 4ab} \right)} } \right]}}{{\left( {2a} \right)}}$$ C) $$\frac{{\left[ { - c \pm \sqrt {{c^2} - 4ab} } \right]}}{{\left( {2a} \right)}}$$ D) $$\frac{{\left[ {c \pm \sqrt {{c^2} - 4ab} } \right]}}{{\left( {2a} \right)}}$$

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Answer & Solution

Answer: Option A

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29

The uniform end of year payment, R, which can be realized for n years from a single present investment, P, at i rate of interest is

A) $$R = P{\left( {1 + i} \right)^n}\left[ {\frac{i}{{{{\left( {1 + i} \right)}^n} - 1}}} \right]$$ B) $$R = P{\left( {1 + i} \right)^n}\left[ {\frac{{{{\left( {1 + i} \right)}^n} - 1}}{i}} \right]$$ C) $$R = P\left[ {\frac{{{{\left( {1 + i} \right)}^n} - 1}}{i}} \right]$$ D) $$R = \frac{P}{{{{\left( {1 + i} \right)}^n}}}\left[ {\frac{i}{{{{\left( {1 + i} \right)}^n} - 1}}} \right]$$

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Answer & Solution

Answer: Option A

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30

A company producing bearing plates for rock bolts has the selling price Rs. 20/unit and the variable cost has Rs. 12/unit. If the total fixed cost is Rs. 5,60,000, then the profit earned for an output of 1,00,000 units of bearing plates is

A) Rs. 2,40,000 B) Rs. 6,40,000 C) Rs. 8,00,000 D) Rs. 14,40,000

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Answer & Solution

Answer: Option A

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Mine Economics MCQs Questions & Answers | Mining Engineering