econ-summary - Economic Analysis Procedure 1 De on le l of...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Economic Analysis Procedure 1. Decideon level of accuracy. What is required? How much data is available? 2. EstimatetheFixed Capital Investment. Select method of estimation. Choosethemost accurategiven your data. Go through an itemby itemestimation. 3. EstimatetheProduct Cost . Itemby itemestimation. 4. EstimateCash Flow . Sales priceand total income, depreciation, taxation, profits (net, gross). 5. Select profitability criteria . Profitability Index, Net Present Worth 6. Recommendation . ChE 4253 - Design I
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
COST ESTIMATION Types Of Cost Estimates 1. Detailed Estimate . Based on Detailed Engineering. Accuracy: ± 5% 2. DefinitiveEstimate . Based on basic Engineering and quotes fromsuppliers and contractors. Accuracy: ± 10% 3. Preliminary Estimate . Enough for budget authorization. Accuracy: ± 20% 4. Study Estimate . Knowledgeof major pieces of equipment Accuracy: ± 30% 5. Order of Magnitudeestimate . Extrapolatesimilar plant cost Accuracy: over 30% ChE 4253 - Design I
Image of page 2
Methods For Estimating Capital Investment 1. Detailed-ItemEstimate . ( ± 5% accuracy, contractor’s estimate) 2. Unit-Cost Estimate . Seep. 250 in PT&W . (10-20%accuracy, definitiveor preliminary estimate) 3. Percentageof Delivered-Equipment Cost . SeeTable6-9, p. 251 in PT&W. ( ± 10% accuracy) 4. Estimation based on “Lang” factors . TheFixed Capital Investment is found by multiplying equipment cost by a factor (seeTable6-10, p. 254 in PT&W) ( ± 30% accuracy, order of magnitudeestimate) ChE 4253 - Design I
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern