Part A: New Business

Product 1
MARR

30%

production rate
capital cost
AOC1
revenue
40000000 (40,000,000.00) (20,000,000.00) $
40,000,000.00
50000000 (40,000,000.00) (25,000,000.00) $
50,000,000.00
60000000 (40,000,000.00) (33,000,000.00) $
60,000,000.00
70000000 (40,000,000.00) (42,000,000.00) $
70,000,000.00
80000000 (42,500,000.00) (52,000,000.00) $
80,000,000.00
90000000 (45,000,000.00) (63,000,000.00) $
90,000,000.00
100000000 (47,500,000.00) (63,000,000.00) $ 100,000,000.00
110000000 (50,000,000.00) (63,000,000.00) $ 110,000,000.00
120000000 (52,500,000.00) (63,000,000.00) $ 120,000,000.00

Product 2
production rate
Capital cost
Annual worth
Salvage value
20000000 (20,000,000.00)
$6,838,304.10
2,000,000.00
30000000 (27,000,000.00)
$9,231,710.54
2,700,000.00
40000000 (32,000,000.00) $10,941,286.56
3,200,000.00
50000000 (35,000,000.00) $11,967,032.18
3,500,000.00
60000000 (36,000,000.00) $12,308,947.39
3,600,000.00
70000000 (35,000,000.00) $11,967,032.18
3,500,000.00
80000000 (32,000,000.00) $10,941,286.56
3,200,000.00

Annual
$
$
$
$
$
$
$
$
$

worth
Profit
AOC2
Profit2
12,938,537.58
$7,061,462.42 (32,000,000.00) -$4,938,537.58
12,938,537.58 $12,061,462.42 (40,000,000.00) -$2,938,537.58
12,938,537.58 $14,061,462.42 (48,000,000.00)
-$938,537.58
12,938,537.58 $15,061,462.42 (42,000,000.00) $15,061,462.42
13,747,196.18 $14,252,803.82 (48,000,000.00) $18,252,803.82
14,555,854.78 $12,444,145.22 (54,000,000.00) $21,444,145.22
15,364,513.38 $21,635,486.62 (55,000,000.00) $29,635,486.62
16,173,171.98 $30,826,828.02 (60,500,000.00) $33,326,828.02
16,981,830.58 $40,018,169.42 (66,000,000.00) $37,018,169.42

AW of Salvage value
Revenue
Annual savings
($83,830.41) $10,000,000.00
$3,245,526.31
($113,171.05) $15,000,000.00
$5,881,460.51
($134,128.66) $20,000,000.00
$9,192,842.09
($146,703.22) $25,000,000.00
$13,179,671.04
($150,894.74) $30,000,000.00
$17,841,947.35
($146,703.22) $35,000,000.00
$23,179,671.04
($134,128.66) $40,000,000.00
$29,192,842.09

Part B: Environmental regulations

MARR
25%
Current technology and buy complementray equipment
Years
Market value
AOC
Intial cost of new machine
0
$500,000.00
-1500000
1
$350,000.00
-80000
2
$245,000.00
-82400
3
$171,500.00
-84872
4
$120,050.00 -87418.16
5
$84,035.00 -90040.7

new technology 1
Years

Market value
0
1
2
3
4
5
6
7
8

AOC
0
0
0
0
0
0
0
0
0

Intial cost of new machine

-3000000
-75000
-3150000
-77250
-3307500
-79567.5
-3472875
-81954.53
-3646518.75
-84413.16
-3828844.6875
-86945.56
-4020286.921875
-89553.92
-4221301.26796875
-92240.54
-4432366.33136719

new technology 2
Years

Market value
0
1
2
3
4
5
6
7
8
9
10

AOC
0
0
0
0
0
0
0
0
0
0
0

Intial cost of new machine

-4000000
-50000
-4120000
-51500
-4243600
-53045
-4370908
-54636.35
-4502035.24
-56275.44
-4637096.2972
-57963.7
-4776209.186116
-59702.61
-4919495.46169948
-61493.69
-5067080.32555046
-63338.5
-5219092.73531698
-65238.66
-5375665.51737649

AOC new
-25000
-25750
-26522.5
-27318.175
-28137.72025

Annual Worth of IC
($946,255.29)
($993,568.06)
($1,043,246.46)
($1,095,408.79)
($1,150,179.22)
($1,207,688.19)
($1,268,072.60)
($1,331,476.23)

Annual Worth of IC
($1,153,898.96)
($1,188,515.93)
($1,224,171.40)
($1,260,896.55)
($1,298,723.44)
($1,337,685.15)
($1,377,815.70)
($1,419,150.17)
($1,461,724.68)
($1,505,576.42)

Total AOC
-105000
-108150
-111394.5
-114736.335
-118178.42505

AW of AOC
($75,000.00)
($76,000.00)
($76,935.74)
($77,806.20)
($78,611.24)
($79,351.49)
($80,028.34)
($80,643.81)

AW of AOC
($50,000.00)
($194,928.31)
($146,133.86)
($122,378.00)
($108,617.05)
($99,833.48)
($93,874.87)
($89,663.67)
($86,600.49)
($84,325.34)

Capital Recovery

AW of AOC

($975,000.00) ($1,980,000.00)
($456,111.11) ($1,148,066.67)
($301,131.15)
($876,152.66)
($232,542.55)
($744,091.29)
($196,162.76)
($667,825.85)

Total AW
($1,021,255.29)
($1,069,568.06)
($1,120,182.20)
($1,173,214.99)
($1,228,790.47)
($1,287,039.68)
($1,348,100.93)
($1,412,120.04)

Total AW
($1,203,898.96)
($1,383,444.23)
($1,370,305.26)
($1,383,274.54)
($1,407,340.49)
($1,437,518.62)
($1,471,690.57)
($1,508,813.84)
($1,548,325.16)
($1,589,901.76)

Total AW
($2,955,000.00)
($1,604,177.78)
($1,177,283.80)
($976,633.84)
($863,988.61)

Part C: Improving Process Efficiency

MARR

25%

Years

MV
0
1
2
3
4
5

Years

AOC
2000000
1500000
1125000
843750
632812.5
474609.375

MV

PW

AW of AOC

120000 ($1,000,000.00) $120,000.00

130000
($888,888.89) $124,444.44
140000
($803,278.69) $128,524.59
150000
($737,127.37) $132,249.32
160000
($685,863.87) $135,630.65

AOC

0
4000000
1
4200000
50000
2
4410000
50000
3
4630500
50000
4
4862025
50000
5
5105126.25
50000
6
5360382.5625
52500
7 5628401.690625
55125
8 5909821.775156 57881.25
9 6205312.863914 60775.31
10 6515578.50711 63814.08

PW

AW of AOC
($800,000.00)
($817,777.78)
($834,622.95)
($850,488.89)
($865,343.97)
($879,171.50)
($891,969.14)
($903,747.84)
($914,530.45)
($924,350.11)

$50,000.00
$50,000.00
$50,000.00
$50,000.00
$50,000.00
$50,222.05
$50,547.32
$50,916.94
$51,299.01
$51,675.37

AW total
($1,120,000.00)
($1,013,333.33)
($931,803.28)
($869,376.69)
($821,494.53)

AW total
($850,000.00)
($867,777.78)
($884,622.95)
($900,488.89)
($915,343.97)
($929,393.55)
($942,516.46)
($954,664.77)
($965,829.46)
($976,025.48)

Part D: Hydrogen Recovery

Membrane Process
Part A
MARR
Capital cost

30%
Capital recovery
AOC
Annual Savings
4000000
($1,642,326.19)
250000
2000000

Part B
Pressure sswing adsorption
Capital cost
3500000
Part c
Hyrogen gas stream

Capital recovery
AOC
Annual Savings
($1,324,380.04)
500000
2100000

Annual worth
3500000

Revenue Annual worth

1750000
$107,673.81

Revenue Annual worth

1600000
$275,619.96

E. Energy Recovery
MARR

30%

Project
1
2
3
4
5
6

Capital Cost Annual

-6000000
-2500000
-1500000
-1500000
-2300000
-3500000

-8300000
-8300000

Savings Rate of Return

1800000
15.24%
4000000
158.6170%
2000000
131.32%
400000
10.42%
1500000
58.75%
3000000
81.34%

Incremental between 2 and 3

-1000000
2000000
2000000
2000000
2000000
2000000

199%

Total Project Comparison

Project
1. New Business
2. Environmental Regulations
3. Improving Process Efficiency
4. Hydrogen Recovery
5. Energy Recovery

Chosen Project
Product 2
Current Technology w/ Equipment
Current Technology
Hydrogen Gas Stream
Project Energy 2, 5, & 6
TOTAL BUDGET

Cost ($)
32000000
1500000
0
0
8300000
41800000