+ General geographic location + The cost of a similar previous project The cost of the present project is determined by the ratio method. The price f the previous project is adjusted for size (capacity) by using the 6-10th’s Tule Capacity Scaling (6-10th's rule) €,= C, (Sy / $39 where C, = cost of equipment to be estimated (new cost) C, = known cost of existing equipment (old cost) S, = size of new piece of equipment S, = capacity of existing piece of equipment {he size adjusted cost is now adjusted for inflation by using published price indices; for example the Chemical Engineering Plant Cost Index (CEPCD) published monthly in Chemical Engineering. This index had a 100 in 1957-59; the value in May 2001 was 395.4 Example 4 200tch factory cost USD50m in 1995; what is the cost of a 300 ti today: Price index in 1995 was 342.5 Price index today is 380.2 C, = (380.2 / 342.5) 50 (300 / 200)°° C, = USD70.8m ase value of ch factory The accuracy off the OOM estimate should be in the Tange -40% to +40%