ITU CHEMICAL ENGINEERING DEPARTMENT

KMM 4902E CHEMICAL ENGINEERING DESIGN II

SPRING 2021

HW No:5

Student No Student Name Signature

Date:
HW5- Estimation of capital costs, Estimation of manufacturing costs, Engineering economic
analysis, Profitability analysis

Q1-(30/100)
a) A distillation column is designed to separate a mixture of A and B at 100°C and 5 barg. The
column is made of carbon steel, has 24 stainless steel valve trays and is 2 m in diameter and
16 m tall.
Using CEPCI for 2020 determine:
 the purchased cost
 the bare module cost
by hand calculations using appropriate equations and graphs given in Chapter7 and Appendix
A of the text book
b) Repeat the part (a) of the problem using the CapCost program. Add each step you take with
CapCost to your answer sheet by making a print screen.

Hints: Here, separate calculations should be made for both the column container and the
shelves, and the sum should be taken as a result.

Q2- (25/100)
Estimate:
 the cost of operating labor (COL),
 the cost of utilities (CUT), and
 the cost of manufacturing (COMd) for the ethylbenzene process.
The process description and details are given as separate file attached to the HW. The total
Bare Module Cost for this plant was calculated as $ 9,050,600

Q3- (45/100)
The following expenses and revenues have been estimated for a new project:
 Revenues from sales = $4.1 × 106/y
 Cost of manufacturing (excluding depreciation) = $1.9 × 106/y
 Taxation rate = 40%
 Fixed capital investment = $7.7 × 106
 (two payments of $5 × 106 and $2.7 × 106 at the end of years 1 and 2, respectively)
 Start-up at the end of year 2
 Working capital = $2 × 106 at the end of year 2
 Land cost = $0.8 × 106 at the beginning of the project (time = 0)
 Project life (for economic evaluation) = 10 y after start-up

Using hand calculations, estimate the NPV of this project assuming an after-tax internal hurdle
rate of 11% p.a., using the depreciation schedule of MACRS method for 5 years

Due Date: 5.5.21 Wednesday