PART-RKM ‘Question-1 pel (a) It has been observed that the cost of a certain type of process vessel is directly proportional to the weight of the vessel. If the vessel is thin walled and spherical, what power factor (exponent) will correlate the cost of the vessel to its volume? How does this compare with the observed most common value of the power factor? (b) What increase in investment would be anticipated should the design capacity of a proposed commercial process plant be doubled’ (©) ARs 20 lakh automobile loan at 10% interest, compounded monthly, is to be repaid in 48 monthly payments. (1) What is the monthly payment and the total amount repaid? Question-2 {10} (@) Credit cards usually charge an interest ata rate of 25 percent per month. What is the effective annual rate of interest? (b) A company is considering purchasing a truck for Rs 80 lakh. Assume this purchase saves the company Rs 12 lakh each year for the 10 year life of the truck, and the salvage value of the truck at the end of this ten year period is Rs 30 lakh. What is their rate of return on this investment? (©) In order to eliminate ice plugging of a distillation tower it has become necessary to install a set of feed gas driers. The drying system required to remove the moisture in the feed will cost Rs 9.2 lakh and will result in a saving of Rs 4.8 lakh per year in methanol consumption which is presently being used as a deicer. However, ifthe size of the drier is increased significantly, requiring an investment of Rs 16.5 lakh, hydrogen sulfide and carbon dioxide in the feed will be removed in addition to the moisture. If these two components can be removed from the feed, it will be possible to shut down a caustic wash unit which presently removes these components after the distillation. The additional savings expected from the removal of the carbon dioxide and hydrogen sulfide amount to some Rs 6 lakh per year. If the firm demands a minimum acceptable rate of return of 15 percent per year on such cost saving projects, the firm is earning 10 percent per year on the bulk of its activities, and the ‘economic life of the distillation project is five years, what do you suggest be done about drying the feed?