Mine Economics MCQ
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What will be the profitability index with discount rate of 12% for the cash flows given below?<br>
The present value of a 4 year annuity of Rs. 10,000 discounted at 10% is
Four alternative investment opportunities are available in a mining project each offering different revenues for the next two years as shown in the table. If the interest rate is 10% annually, which alternative provides the best investment opportunity based on the net present value?<br>
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<table class="table-style-1"> <tr> <td></td> <td>Case I</td> <td>Case II</td> <td>Case III</td> <td>Case IV</td> </tr> <tr> <td>Initial Investment (Rs.)</td> <td>40,000</td> <td>1,00,000</td> <td>80,000</td> <td>1,20,000</td> </tr> <tr> <td>Return in Year 2</td> <td>30,000</td> <td>75,000</td> <td>65,000</td> <td>80,000</td> </tr> <td>Return in Year 3</td> <td>30,000</td> <td>75,000</td> <td>65,000</td> <td>80,000</td> </table> I
A mining industry has the following total cost and total revenue functions:<br>Total cost = TC = 50 + 100q - 6q<sup>2</sup> + $$\frac{1}{3}$$ q<sup>3</sup><br>Total revenue = TR = 64q<br>Where q is the output of mine in tonne/day<br>The profit will be maximized for what level of production?
An investment at 10'% yearly interest rate, compounded quarterly, accumulates to a sum of Rs. 120,000 in 5 years. The present value of the sum in rupees is
The following information is provided for an ore deposit:<br>Number of waste blocks = 10<br>Number of ore blocks = 5<br>Volume of each waste block, m<sup>3</sup> = 600<br>Total cost of waste handling per m<sup>3</sup> = Rs. 100<br>Tonnage of each ore block = 400<br>Total cost of ore handling per ton = Rs. 150<br>Sale price of ore per ton = Rs. 500<br>The net cash flow of mining the deposit in lakhs of rupees, is
A company takes a loan of Rs. 25,000 at 8% interest for the extension of a mine. To repay the loan, an additional saving of Rs. 2500 per annum is necessary. The period taken for repayment is
The ABC copper company recently bought an ore-bearing parcel of land for Rs. 2,000,000. The recoverable reserves in the mine were estimated to be 5,00,000 tons. If 75,000 tons of ore were mined during the first year and 50,000 tons sold, what was the depletion allowance for one year?
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 for a target profit of Rs. 4,00,000, the total output units of bearing plates is
For an open pit operation the value of metal is Rs. 210/kg, and recoverable grade is 1.2%. Production cost per tonne of ore inclusive of mining and processing but excluding stripping is Rs. 2000. If the break even stripping ratio is 3.49 m<sup>3</sup>/te. then the stripping cost is (lte = 1000 kg)
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
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
For a mine production t per year, the total cost of production is given by (at<sup>2</sup> + b). The revenue from sale is given by ct. If a, b and c, are constants, the breakeven value of t is
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
The net present value in Rs. of a 3 year annuity of Rs. 10,000 discounted at 10% is
The cash flow table of a manganese mine for a particular year is shown below:<br>
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 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
Payback period is the time required
Sum of the years digit method is used for
What will be the effective rate of interest for nominal rate of interest 10%, when money is compounded quarterly?
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
A mining company is considering the following project:<br>Cash Flows (Rs.) for five years<br>
As per DCF analysis a project report is acceptable if
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
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<br>
The net present value of Rs. 400 at the end of 5 years at 10% discount rate is
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
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
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