WELCOME to Cost & Evaluation Workbook accompanying Plant Design and Economics for Chemical Engineers, 5th edition,

by Peters, Timmerhaus and West. These spreadsheets are made available for convenient implementation of methods presented in the text. The sheets are color coded to assist the user. A hypothetical example, 'Illustration 101', is included. The basis for all costs is Jan. 2002. Steps to follow: 1. Please download the workbook to your computer. 2. The sheets are intended for use in the sequence presented. However, any sheet may be by-passed so long as the information skipped is input manually where needed in subsequent sheets. Default values may be replaced by the user. 3. Purchased Equipment Costs may be obtained from the file "Equipment Costs," the graphs in the text, or otherwise, and entered manually into cell H12 on the Capital Inv.' spreadsheet. 4. On the sheet 'Capital Inv.' enter the estimated current total purchased cost of the process equipment. For the proposed plant type, copy the corresponding "Fraction of delivered equipment" column entries into the tan "User" column. The sheet then calculates and transfers results to appropriate subsequent sheets. 5. On the sheet 'Materials & Labor' enter the product prices and flowrates, the raw materials prices and flow rates, and the labor requirements and current ENR labor index. 6. On the sheet 'Utilities' the quantity of each utility needed annually must be entered in appropriate units. The total annual utilities cost is transferred to sheet 'Annual TPC'. 7. The 'Depreciation' sheet is used only if the user wishes to change the default (5-year MACRS) depreciation method. To make a change, copy the appropriate MACRS row to the 'Annual depreciation" row of sheets 'Evaluation' and 'Year-0 $', or, enter constant annual (straight line) value into depreciation row of those sheets. 8. On the 'Annual TPC' sheet, all values are calculated from information available on other sheets. The user may change defaults or enter preferred values. The calculated annual TPC is transferred to 'Evaluation'. 9. The sheet 'Evaluation' uses values from other sheets to calculate the common profitability measures. The user may change defaults, or enter desired values into the sheet. In particular, the user may change the default inflation rates in order to study their effects on profitability. All calculations in 'Evaluation' are made in current (i.e. inflated) dollars. Inflation adjustments are made from the time of the estimates. To make evaluations for periods of less than 10 years, leave unneeded columns blank. For periods greater than 10 years, insert columns as needed and copy from an existing year column into the new columns. Check equations for correct cell references. 10. A second evaluation sheet, 'Year-0 $', also is included. It is the same as sheet 'Evaluation', except that all the inflated $ values are converted to constant, year-0 dollars (as discussed in the text). This method is considered to reflect more realistically the effect of inflation on the profitability measures. The user may change

the default inflation rates in order to study their impacts on profitability.

ESTIMATION OF CAPITAL INVESTMENT BY PERCENTAGE OF DELIVERED EQUIPMENT METHOD

(See Table 6-9) The fractions in the cells below are approximations applicable to typical chemical processing
plants. These values may differ depending on many factors such as location, process type, etc. Required user input Subtotal Result Default

Required, from a linked sheet or entered manually

Project Identifier: Illustration 101

Notes & comments Fraction of delivered equipment User: copy Calculated from values values, SolidSolid-fluid Fluid at left or million $ processing processing processing insert plant plant plant Direct Costs 8.800 0.880 9.680 4.550 3.485 6.582 1.065 1.742 0.968 6.776 34.848

Purchased equipment, E' Delivery, fraction of E' Subtotal: delivered equipment Purchased equipment installation Instrumentation&Controls(installed) Piping (installed) Electrical systems (installed) Buildings (including services) Yard improvements Service facilities (installed) Total direct costs

0.10 0.45 0.18 0.16 0.10 0.25 0.15 0.40 1.69

0.10 0.39 0.26 0.31 0.10 0.29 0.12 0.55 2.02

0.10 0.47 0.36 0.68 0.11 0.18 0.10 0.70 2.60

0.10 0.47 0.36 0.68 0.11 0.18 0.10 0.70 2.60

Engineering and supervision Construction expenses Legal expenses Contractor's fee Contingency Total indirect costs

Indirect Costs 0.33 0.39 0.04 0.17 0.35 1.28

0.32 0.34 0.04 0.19 0.37 1.26

0.33 0.41 0.04 0.22 0.44 1.44

0.33 0.41 0.04 0.22 0.44 1.44

3.194 3.969 0.387 2.130 4.259 13.939 48.787

Sent to 'Evaluation' and 'Year-0 $', there adjusted as described below

Fixed capital investment (FCI) Working capital (WC) 0.70 0.75 0.89 0.89

8.615

Total capital investment (TCI) 57.402 The investments are made over a period of time. This is represented on the basis that startup (time 0) will be three years after the date of the estimate, that 15% of the fixed capital investment is spent in the year beginning at the time of the estimate (year ending at time -2), 35% in the second year (ending at -1), and 50% in the third year (ending at time 0). These values may be changed. The amounts are inflated at the beginning of each year after the estimate, by the default construction inflation rate. These changes are all made in the sheets 'Evaluation' and 'Year-0 $'. It is assumed that all working capital is spent at time 0.

ANNUAL RAW MATERIAL COSTS AND PRODUCTS VALUES Process Identifier: Illustration 101 Required user input Notes & comments Default, may be changed RESULT Products, Coproducts and Byproducts Name of Material Price, $/kg Annual Annual Amount, value of million product, kg/y million $/y Main Byproduct 1.60 0.25 30.000 12.000 48.00 3.00 0.00 0.00 0.00 0.00 51.00

ANNUAL OPERATING LABOR COSTS Process Identifier: Illustration 101 Required user input Notes & comments Default, may be changed RESULT Operating Labor Number of Shifts per Operator Annual operators per day** rate, $/h # operating shift* labor cost, million $/y 3 33.67 3 0.885 *See Tables 6-13 and Fig. 6-9. **Default = 3 for continuous process. Enter appropriate value for batch operation. # To obtain current, local value, enter (latest local 1 ENR skilled labor index)/6067 = Sent to 'Annual TPC'

Total annual value of products =

Sent to 'Evaluation' and 'Year-0 $'

Raw Materials Name of Material Price, $/kg Annual Annual raw Amount, materials million cost, million kg/y $/y 1 2 3 0.45 0.25 0.05 20.000 12.000 13.000 9.00 3.00 0.65 0.00 0.00 0.00 12.65

Total annual cost of raw materials =

Sent to sheet 'Annual TPC'

UTILITY COSTS See Table 6-14 and Table B-1 for ranges of utility unit costs and sources of information. Default values are rough averages and may be changed. Utility costs can differ widely with location.
Process Identifier: Illustration 101 Required user input Result Notes & comments Default, may be changed

TOTAL UTILITY COST =

2.025 million $/y Sent to sheet 'Annual TPC' Default unit cost Default cost units Annual utility Default units Annual utility requirement, in of utility cost, million appropriate units requirement $/y
100 m3#/y 100 m3#/y 1800000 kWh/y kWh/y GJ/y GJ/y GJ/y GJ/y GJ/y GJ/y GJ/y GJ/y 1000 kg/y 1000 kg/y 1000 kg/y m3/y m3/y 1000 kg/y 1000 kg/y 2500000 400000 m3/y m3/y m3/y 0.000 0.000 0.081 0.000 0.000 0.000 1.080 0.000 0.000 0.000 0.000 0.000 0.000 0.240 0.000

Utility Air, compressed

Process air Instrument air

0.45 $/100m3 # 0.90 $/100m3 # 0.045 $/kWh 0.05 $/kWh 1.66 3.30 3.00 12.00 4.00 5.00 8.00 14.00 $/GJ $/GJ $/GJ $/GJ $/GJ $/GJ $/GJ $/GJ

Electricity
Purchased, U.S. average Self-generated

Fuel
Coal Fuel oil Natural gas Manufactured gas

360000

Refrigeration, to temperature
15 oC 5 C -20 oC -50 oC

Steam, saturated
3550 kPa 790 kPa Exhaust (150 kPa) 8.00 $/1000 kg 6.00 $/1000 kg 2.00 $/1000 kg 0.53 $/m3 0.53 $/m3 145.00 $/1000 kg 36.00 $/1000 kg 0.08 $/ m3 0.53 $/m3 0.90 $/m3 40000

Waste water
Disposal Treatment 400000 0.212 0.000 0.000 0.200 0.212 0.000

Waste disposal
Hazardous Non-hazardous

Water
Cooling Process General Distilled
#

measured at 101.3 kPa and 15C.

DEPRECIATION Default = 5-y MACRS. Default is in place in sheets 'Evaluation' and 'Year-0 $'. To use a different recovery period, copy the entire row into the depreciation row of sheets 'Evaluation' and 'Year-0 $' (add columns to these sheets as needed). User may elect straight-line depreciation and period (d = FCI/period), and substitute the value into the depreciation row on sheets 'Evaluation' and 'Year-0 $'. Entry = MACRS depreciation as fraction/y of FCI YEAR Recovery period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 3-year 0.333 0.444 0.148 0.074 f 0.200 0.320 0.192 0.115 0.115 0.058 7-year 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 10-year 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.066 0.066 0.033 15-year 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 20-year 0.038 0.072 0.067 0.062 0.057 0.053 0.049 0.045 0.045 0.045 0.045 0.045 0.045 0.045

15

16

17

18

19

20

21

0.059 0.045

0.030 0.045 0.045 0.045 0.045 0.045 0.022

ANNUAL TOTAL PRODUCT COST AT 100% CAPACITY See Figure 6-7 and 6-8 Default, may be changed Subtotal Notes & comments User input RESULT Required, may be calculated here, in linked worksheet, or entered manually. Project identifier: Illustration 101 Capacity Fixed Capital Investment, FCI Item Raw materials Operating labor Operating supervision Utilities Maintenance and repairs Operating supplies Laboratory charges 30 50.114
Default factor, user may change

106 kg per year million $

Basis Basis cost, Cost, million $/y million $/y

0.15 0.06 0.15 0.15

of operating labor

0.885

Royalties (if not on lump-sum basis) 0.01 0.267 Catalysts and solvents 0 -0.000 Variable cost = 19.550 Sent to 'Evaluation' and Taxes (property) 0.02 of FCI 50.114 1.002 'Year-0 $' Financing (interest) 0 of FCI 50.114 0.000 Insurance 0.01 of FCI 50.114 0.501 Rent 0 of FCI 50.114 0.000 Calculated separately Depreciation Fixed Charges = 1.503 Plant overhead, general 0.6 of labor, supervision 4.024 and maintenance 2.415 Plant Overhead = 2.415 Manufacturing cost = 23.468 Administration 0.2 of labor, supervision 4.024 and maintenance 0.805 of co Distribution & selling 0.05 26.674 1.334 of co Research & Development 0.04 26.674 1.067 General Expense = TOTAL PRODUCT COST WITHOUT DEPRECIATION = co = 3.206 26.674
Sent to 'Evaluation' and 'Year-0 $'

of FCI 50.114 of maintenance & repair 3.007 of operating labor 0.885 of co 26.674

12.650 0.885 0.133 2.025 3.007 0.451 0.133

ECONOMIC EVALUATION Project identifier: Illustration 101 Expenditures, entries must be negative Default values, can be changed Required, user must supply Required, may be calculated here, in linked worksheet, or entered manually Comments and notes begin in column S

CURRENT, i.e. INFLATED, DOLLARS Construction inflation rate, fraction/y = 0.02 Product price inflation rate, fraction/y = 0 TPC inflation rate, fraction/y = 0.02 Annual-compounding discount rate, fraction/y = minimum acceptable rate of return, mar = Continuous-compounding discount rate, fraction/y = minimum acceptable rate of return, rma= Income tax rate = RESULT 0.35

0.15 0.14

Year ending at time -3 -2 -1 0 6 1. Land, 10 $ (see notes) 0.00 0.00 0.00 2. Fixed Capital Investment, 106$ -7.32 -17.42 -25.38 3. Working Capital, 106$ (see notes) -8.85 4. Salvage Value, 106$ 5. Total Capital Investment, 106$ -7.32 -17.42 -34.23 6. Annual Investment, 106$ 7. Start-up cost, 106$ 8. Operating rate, fraction of capacity 9. Annual sales, 106$ 10. Annual Total Product Cost, depreciation not included,106$ 11. Annual depreciation factor, 1/y 12. Annual depreciation, 106$/y 13. Annual Gross Profit, 106$ 14. Annual Net Profit, 106$ 15. Annual operating cash flow,106$ 16. Total annual cash flow, 106$ 0.00 -7.32 -17.42 -34.23 17. Cumulative cash position, 106$ 0.00 -7.32 -24.74 -58.96 Profitability measures, time value of money NOT included: 18. Return on investment, ave. %/y 13.5 19. Payback period, y 3.9 6 20. Net return, 10 $ -0.86 at mar = 15.0 %/y

0.00 -5.01 0.50 25.50 -17.93 0.20 10.02 -7.47 -7.47 2.56 2.56 -56.41

0.00 0.90 45.90 -26.76 0.320 16.04 3.11 2.02 18.06 18.06 -38.35

0.00 1.00 51.00 -29.45 0.192 9.62 11.93 7.75 17.38 17.38 -20.98

0.00 1.00 51.00 -30.04 0.115 5.77 15.19 9.87 15.65 15.65 -5.33

0.00 1.00 51.00 -30.64 0.115 5.77 14.59 9.48 15.25 15.25 9.92

0.00 1.00 51.00 -31.25 0.058 2.89 16.86 10.96 13.85 13.85 23.77

0.00 1.00 51.00 -31.88

0.00 1.00 51.00 -32.51

0.00 1.00 51.00 -33.17

Row 10 Sum 0.00 0.00 -50.11 8.85 0.00 0.00 0.00 -58.96 0.00 0.00 1.00 51.00 479.40 -33.83 -297.45 50.11 126.82 79.82 129.93 70.97

19.12 12.43 12.43 12.43 36.20

18.49 12.02 12.02 12.02 48.22

17.83 11.59 11.59 11.59 59.81

17.17 11.16 11.16 11.16 70.97

Profitability measures including time value of money, with ANNUAL END-OF-YEAR cash flows and discounting 21. Present worth factor 1.52 1.32 1.15 1.00 0.87 0.76 0.66 0.57 0.50 0.43 22. Present worth of annual cash 0.00 -9.68 -20.03 -34.23 2.22 13.65 11.42 8.95 7.58 5.99 flows, 106$ 23. Net present worth, 106$ = 0.53 at discount rate= 15.0 %/y 24. Discounted cash flow rate of return, DCFR, %/y = Iterated discount rate= 0.152 25. Present worth factor 26. Present worth of annual cash flows, 106$

0.38 4.67

0.33 3.93

0.28 3.30

0.25 2.76 0.53

To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$41, to be made = 0 by 15.2 changing cell $C$39. Solver must be rerun after a change on any sheet. 1.53 0.00 1.33 -9.71 1.15 -20.06 1.00 -34.23 0.87 2.22 0.75 13.61 0.65 11.37 0.57 8.89 0.49 7.52 0.43 5.93 0.37 4.62 0.32 3.88 0.28 3.25 0.24 2.71 0.00

Profitability measures including time value of money, with CONTINUOUS cash flows and discounting 27. Present worth factor 1.63 1.42 1.23 1.07 0.93 0.81 0.71 0.61 0.53 28. Present worth of annual cash 0.00 -10.39 -21.50 -36.74 2.39 14.65 12.26 9.60 8.14 flows, 106$ 0.57 at discount rate= 14.0 %/y 29. Net present worth, 106$ = 30. Discounted cash flow rate of return, DCFR, %/y = Iterated discount rate= 0.141 31. Present worth factor 32. Present worth of annual cash flows, 106$

0.46 6.42

0.40 5.02

0.35 4.22

0.31 3.54

0.27 2.96 0.57

To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$51, to be made = 0 by 14.1 changing cell $C$49. Solver must be rerun after a change on any sheet. 1.64 0.00 1.43 -10.43 1.24 -21.55 1.07 -36.77 0.93 2.38 0.81 14.62 0.70 12.21 0.61 9.55 0.53 8.08 0.46 6.37 0.40 4.96 0.35 4.17 0.30 3.49 0.26 2.92 0.00

COMMENTS & NOTES Time -3 is default time of estimate, time -2 is the first inflation. Land can be included, default is 0. Time 0 is startup time. Working capital (-) at time 0, (+) when recovered. Salvage value is (+) at time of recovery. Planned investments (e.g. replacements) entered here at inflated value. Startup default is 10% of FCI. Two year ramp-up of production. Operating rate affects only variable part of TPC. Depreciation default is 5-year MACRS. Start costs subtracted here. No income tax credit taken for losses. =Annual operating cash flow + Annual investment ROI, PBP and Net return do NOT include recovery amounts, by text definition. Compare with ROI = 15.0 %/y Compare with reference PBP = 3.6 y. Compare with net return = 0.

NPW and DCFR include recovery amounts, by text definition. Uses single-year present worth factor from Table 7-3. If there is more than one sign change in the annual cash flow, check DCFR value separately. Compare with net present worth = 0. "No value" results from a negative total cash flow in R27. Compare with R5.

NPW and DCFR include recovery amounts, by text definition. Uses 1-year present worth factor from Table 7-5. If there is more than one sign change in the annual cash flow, check DCFR value separately. Compare with net present worth =0. "No value" results from a negative cash flow in R26. Compare with R6

ECONOMIC EVALUATION Project identifier: Illustration 101 Expenditures, entries must be negative Default values, can be changed Required, user must supply Required, may be calculated here, in linked worksheet, or entered manually Comments and notes begin in column S

CONSTANT, YEAR-0 DOLLARS Construction inflation rate, fraction/y = 0.02 Product price inflation rate, fraction/y = 0 TPC inflation rate, fraction/y = 0.02 Annual-compounding discount rate, fraction/y = minimum acceptable rate of return, mar = Continuous-compounding discount rate, fraction/y = minimum acceptable rate of return, rma= Income tax rate = 0.35 RESULT

0.15 0.14

Year ending at time -3 -2 -1 0 6 1. Land, 10 $ (see notes) 0.00 0.00 0.00 2. Fixed Capital Investment, 106$ -7.61 -17.77 -25.38 3. Working Capital, 106$ (see notes) -8.96 4. Salvage Value, 106$ 5. Total Capital Investment, 106$ -7.61 -17.77 -34.34 6 6. Annual Investment, 10 $ 7. Start-up cost, 106$ 8. Operating rate, fraction of capacity 9. Annual sales, 106$ 10. Annual Total Product Cost, depreciation not included,106$ 11. Annual depreciation factor, 1/y 12. Annual depreciation, 106$/y 13. Annual Gross Profit, 106$ 14. Annual Net Profit, 106$ 15. Annual operating cash flow,106$ 16. Total annual cash flow, 106$ 0.00 -7.61 -17.77 -34.34 17. Cumulative cash position, 106$ 0.00 -7.61 -25.38 -59.72 Profitability measures, time value of money NOT included: 18. Return on investment, ave. %/y 11.5 19. Payback period, y 4.3 20. Net return, 106$ -2.08 at mar = 15.0 %/y

0.00 -4.98 0.50 25.00 -17.58 0.20 9.95 -7.51 -7.51 2.44 2.44 -57.28

0.00 0.90 44.12 -25.72 0.320 15.61 2.79 1.81 17.42 17.42 -39.85

0.00 1.00 48.06 -27.75 0.192 9.18 11.12 7.23 16.41 16.41 -23.44

0.00 1.00 47.12 -27.75 0.115 5.40 13.96 9.08 14.48 14.48 -8.96

0.00 1.00 46.19 -27.75 0.115 5.30 13.15 8.54 13.84 13.84 4.88

0.00 1.00 45.29 -27.75 0.058 2.60 14.94 9.71 12.31 12.31 17.18

0.00 1.00 44.40 -27.75

0.00 1.00 43.53 -27.75

0.00 1.00 42.67 -27.75

Row Sum 0.00 -50.76 8.96 0.00 0.00 0.00 -59.72 0.00 0.00 10 0.00 1.00 41.84 428.21 -27.75 -265.31 48.04 109.88 68.80 116.84 57.12

16.65 10.82 10.82 10.82 28.01

15.78 10.25 10.25 10.25 38.26

14.92 9.70 9.70 9.70 47.96

14.09 9.16 9.16 9.16 57.12

Profitability measures including time value of money, with ANNUAL END-OF-YEAR cash flows and discounting 21. Present worth factor 1.52 1.32 1.15 1.00 0.87 0.76 0.66 0.57 0.50 0.43 22. Present worth of annual cash 0.00 -10.07 -20.43 -34.34 2.12 13.18 10.79 8.28 6.88 5.32 flows, 106$ 23. Net present worth, 106$ = -5.83 at discount rate= 15.0 %/y 24. Discounted cash flow rate of return, DCFR, %/y = Iterated discount rate= 0.129 25. Present worth factor 26. Present worth of annual cash flows, 106$

0.38 4.07

0.33 3.35

0.28 2.76

0.25 2.26 -5.83

To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$41, to be made = 0 by 12.9 changing cell $C$39. Solver must be rerun after a change on any sheet. 1.44 0.00 1.27 -9.71 1.13 -20.06 1.00 -34.34 0.89 2.16 0.78 13.67 0.69 11.40 0.62 8.91 0.54 7.54 0.48 5.94 0.43 4.63 0.38 3.88 0.34 3.25 0.30 2.72 0.00

Profitability measures including time value of money, with CONTINUOUS cash flows and discounting 1.63 1.42 1.23 1.07 0.93 0.81 0.71 0.61 0.53 27. Present worth factor 28. Present worth of annual cash 0.00 -10.81 -21.93 -36.86 2.28 14.14 11.58 8.88 7.39 flows, 106$ -6.26 at discount rate= 14.0 %/y 29. Net present worth, 106$ = 30. Discounted cash flow rate of return, DCFR, %/y = Iterated discount rate= 0.121 31. Present worth factor 32. Present worth of annual cash flows, 106$

0.46 5.71

0.40 4.37

0.35 3.60

0.31 2.96

0.27 2.43 -6.26

To get DCFR, go to "Tools" and function "Solver." Set target cell as $R51, to be made = 0 by 12.1 changing cell $C$49. Solver must be rerun after a change on any sheet. 1.53 0.00 1.36 -10.32 1.20 -21.33 1.06 -36.51 0.94 2.30 0.83 14.53 0.74 12.12 0.65 9.47 0.58 8.02 0.51 6.32 0.45 4.92 0.40 4.13 0.36 3.46 0.32 2.89 0.00

COMMENTS & NOTES Time -3 is default time of estimate, time -2 is the first inflation. Land can be included by replacing the default 0. Land is (-) at time 0, (+) when recovered Time 0 is startup time. Working capital (-) at time 0, (+) when recovered. Salvage value is (+) at time of recovery. Planned investments (e.g. replacements) entered here at inflated value. Startup default is 10% of FCI. Two year ramp-up of production. Operating rate affects only variable part of TPC. Depreciation default is 5-year MACRS.

No income tax credit taken for losses. =Annual investment + Annual operating cash flow ROI, PBP and Net return do NOT include recovery amounts, by text definition. Compare with ROI = 15.0 %/y Compare with reference PBP = 3.6 y. Compare with net return = 0.

NPW and DCFR include recovery amounts, by text definition. Uses single-year present worth factor from Table 7-3. If there is more than one sign change in the annual cash flow, check DCFR value separately. Compare with net present worth = 0. "No value" results from a negative total cash flow in R27. Compare with R5.

NPW and DCFR include recovery amounts, by text definition. Uses 1-year present worth factor from Table 7-5. If there is more than one sign change in the annual cash flow, check DCFR value separately. Compare with net present worth =0. "No value" results from a negative cash flow in R26. Compare with R6