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Mining Engineering · all questions

Mine Economics
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Q1

Open question
A coal mine receives two bids for purchase of a new dragline. The first bid quotes Rs. 150 crore as a price to be paid in full on delivery. The second bid quotes Rs. 180 crore as a price payable at the end of the third year after delivery. If the discount rate is 12%, the difference in NPV between the first and second bids in crore of rupees is

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Q2

Open question
A person borrows a sum of Rs. 50,000 @ 6% interest rate for 10 years. Determine the equal annual sum to be paid at the end of each year to repay the loan.

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Q3

Open question
The probability distribution of the outcome of an investment is
Outcome (Rs.) 1000 700 300
Probability 0.2 0.5 0.3
The expected rate of return is

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Q4

Open question
Hoskold's formula is used for

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Q5

Open question
At a discount rate of 12%, uniform annual savings producing Rs. 6 lakhs at the end of 10 years is

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Q6

Open question
A cash flow diagram is shown below. Based on NPV, at 10% rate of interest, the minimum annuity x at which the investment becomes viable is
Mine Economics mcq question image

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Q7

Open question
The cash flow of a project is given as follows:
Year 0 1 2 3 4
Cash flow (Rs.) -5000 15000 15000 20000 22500
The internal rate of return (IRR) in percent lies between

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Q8

Open question
Using Hoskold's formula, the present worth, in rupees of annuity of Rs. 1 per year for the 10 years after the deferment period of 5 years and allowing the purchaser 10 % interest is

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Q9

Open question
An equipment cost Rs. 8,00,000 today and has a service life of 15 years. The salvage value at the end of 15 years is Rs. 2,00,000. What will be the value at the end of 10 years?

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Q10

Open question
The probability distribution of the outcome of an investment is
Outcome (Rs.) 1000 700 300
Probability 0.2 0.5 0.3
The measure of risk of the investment based on standard deviation (σ) is given as

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Q11

Open question
In a mine site, the cost of shaft sinking in lakhs of rupees is given as 2.64D + 34.8, where D is the shaft depth in m. In the same site, the corresponding cost of driving an incline is 0.96 L, where L is the length of the incline in m. Assuming L by D ratio is 3.0, the depth in m beyond which the shaft sinking becomes more economical is

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Q12

Open question
An investment of Rs. 10,000, compounded annually, is estimated to return Rs. 20,000 after 6 years from the date of investment. The expected rate of return on this investment in percentage is

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Q13

Open question
A company invested Rs. 4 lakhs in a machine. The net income expected from the operation of the machine is Rs. 80,000 per annum. The payback period for the machine in years is

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Q14

Open question
The net present value of Rs. 400 at the end of 5 years at 10% discount rate is

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Q15

Open question
A firm, having a cost of capital of 12%, evaluates a small mining project of initial investment of Rs. 100 lakhs. For the benefits shown in the table below, the benefit-cost ratio of the project is
Year 1 2 3 4
Benefits (Rs. in lakhs) 25 40 40 50

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Q16

Open question
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 break even output units of bearing plates is

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Q17

Open question
As per DCF analysis a project report is acceptable if

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Q18

Open question
A mining company is considering the following project:
Cash Flows (Rs.) for five years
Year 0 1 2 3 4 5
Net Cash Flow In (Rs.) -50000 15000 15000 15000 15000 15000
What is the project's IRR?

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Q19

Open question
A mining equipment has a life of 5 years with no salvage value. Assuming that the depreciation of the equipment is calculated by the straight line method, the average annual value of the equipment percentage of its original value is

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Q20

Open question
What will be the effective rate of interest for nominal rate of interest 10%, when money is compounded quarterly?

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