Q1. Which of the following costs is independent of power generation?
A) Fuel cost
B) Lubrication cost
C) Interest on capital
D) Water treatment cost
Correct Option: C
Explanation: Interest on capital is a fixed charge that depends only on the initial investment. It must be paid irrespective of whether the plant generates power or not.
Q2. The cost incurred due to depreciation, interest, taxes and insurance is called:
A) Running cost
B) Operating cost
C) Fixed cost
D) Variable cost
Correct Option: C
Explanation: Fixed costs remain constant irrespective of load and include depreciation, interest, taxes, and insurance.
Q3. Which power plant has highest initial cost but lowest running cost?
A) Thermal power plant
B) Diesel power plant
C) Nuclear power plant
D) Hydro-electric power plant
Correct Option: D
Explanation: Hydro-electric plants require heavy civil construction initially, but running cost is lowest because water is free.
Q4. Cost of electrical energy is generally expressed in:
A) Rs/kW
B) Rs/MW
C) Rs/kWh
D) Rs/kVA
Correct Option: C
Explanation: Electrical energy is measured in kilowatt-hour (kWh), so cost is expressed as Rs/kWh.
Q5. Which factor most significantly reduces the cost per unit of energy?
A) High capital cost
B) Low efficiency
C) High load factor
D) High fuel cost
Correct Option: C
Explanation: High load factor spreads fixed cost over more units, reducing cost per unit.
Q6. A power station has a fixed cost of ₹40 lakh/year and running cost of ₹2 per kWh. If annual generation is 1.5×107 kWh, find cost per unit.
A) ₹2.27
B) ₹2.67
C) ₹2.40
D) ₹3.00
Correct Option: A
Explanation: Fixed cost/unit = 40×105 / 1.5×107 = ₹0.267. Total cost = 2 + 0.267 ≈ ₹2.27.
Q7. Which depreciation method gives maximum depreciation in initial years?
A) Straight line method
B) Sinking fund method
C) Declining balance method
D) Annuity method
Correct Option: C
Explanation: Depreciation is calculated on book value, which is highest in initial years.
Q8. High load factor of a power station results in:
A) High cost per unit
B) Poor utilization
C) Reduced cost of generation
D) Increased reserve capacity
Correct Option: C
Explanation: Better utilization reduces fixed cost per unit.
Q9. A plant has capital cost ₹6000/kW, interest & depreciation 12% annually. Load factor is 0.5. Find fixed cost per kWh.
A) ₹1.37
B) ₹1.64
C) ₹1.92
D) ₹2.40
Correct Option: B
Explanation: Fixed cost = ₹720/kW-year, energy = 4380 kWh. Fixed cost/unit = 720/4380 ≈ ₹1.64.
Q10. Which cost varies directly with energy generated?
A) Interest
B) Depreciation
C) Fuel cost
D) Insurance
Correct Option: C
Explanation: Fuel cost increases with energy generated.
Q11. Annual fixed charges = ₹25 lakh, annual energy = 10 million kWh. Fixed cost per unit is:
A) ₹0.20
B) ₹0.25
C) ₹0.30
D) ₹0.40
Correct Option: B
Explanation: Fixed cost/unit = 25×105 / 10×106 = ₹0.25.
Q12. In straight line depreciation method, annual depreciation depends on:
A) Market value
B) Scrap value
C) Rate of interest
D) Energy generated
Correct Option: B
Explanation: Annual depreciation depends on initial cost, scrap value, and life.
Q13. Capital cost = ₹400 crore, life = 40 years, salvage value = 10%. Find annual depreciation.
A) ₹9 crore
B) ₹10 crore
C) ₹11 crore
D) ₹12 crore
Correct Option: A
Explanation: Depreciable amount = 360 crore. Annual depreciation = 360/40 = ₹9 crore.
Q14. Which factor does NOT affect cost of electrical energy?
A) Load factor
B) Diversity factor
C) Plant efficiency
D) Consumer tariff
Correct Option: D
Explanation: Tariff is selling price, not generation cost.
Q15. Running cost = ₹3 per kWh. Fixed cost = ₹30 lakh/year. Annual output = 2×107 kWh. Total cost per unit?
A) ₹3.15
B) ₹3.25
C) ₹3.40
D) ₹3.60
Correct Option: A
Explanation: Fixed/unit = ₹0.15. Total cost = 3 + 0.15 = ₹3.15.
Q16. Which depreciation method ensures replacement of plant at end of life?
A) Straight line
B) Declining balance
C) Sinking fund
D) Unit method
Correct Option: C
Explanation: Sinking fund accumulates money with interest for replacement.
Q17. A plant operates at 80 MW with LF = 0.6. Fixed cost = ₹1200/kW-year. Find fixed cost per kWh.
A) ₹0.22
B) ₹0.28
C) ₹0.35
D) ₹0.40
Correct Option: A
Explanation: Fixed cost/unit ≈ ₹0.22.
Q18. High load factor indicates:
A) Poor utilization
B) High standby losses
C) Better plant utilization
D) High peak demand
Correct Option: C
Explanation: High load factor means plant operates near rated capacity longer.
Q19. Initial cost = ₹5000/kW, interest = 10%, depreciation = 5%. Annual energy per kW = 4000 kWh. Fixed cost/unit?
A) ₹1.25
B) ₹1.50
C) ₹1.88
D) ₹2.00
Correct Option: C
Explanation: Fixed cost = ₹750/kW-year. Fixed cost/unit = 750/4000 = ₹1.88.
Q20. A plant has fixed cost ₹50 lakh/year and running cost ₹2.5 per kWh. If energy generated is 1 crore kWh, cost per unit is:
A) ₹3.00
B) ₹3.25
C) ₹3.50
D) ₹4.00
Correct Option: A
Explanation: Fixed/unit = ₹0.5. Total cost = 2.5 + 0.5 = ₹3.00.