Capital cost amortization

BioTrol soil washing system costs for the MacGilhs and Gibbs Superfund site in New Brighton, Minnesota, were examined on both an integrated and a unit process basis. Costs for the demonstration study were extrapolated to full-scale treatment of the wood preserving site. The extrapolation included both operating costs and capital costs amortized over an assumed 10-year equipment life span. Costs were estimated in 1991 dollars. 

The above-mentioned analyses apply to economic conditions in the United States, in the 2013 time frame. Capital cost amortization can be much different in other countries, depending on the effective interest rate. Japan, for instance, has economic arrangements which result in an effective interest rate in the 2% range. Countries with high inflation rates might have much higher interest rates than those currently applying in the United States. 

The start-up costs are usually included in the capital cost of the project. For tax purposes they are often amortized over 5 to 10 years. 

Since power is a substantial component of the fixed operating cost of a unit, the operating cost would run approximately seven times more on a scrubber installation. The installation costs of a hot-rolled steel precipitator to handle 100,000 cfm would be between 3.50 and 4.50/cfm as opposed to 1.40 to 1.80/cfm for a venturi scrubbing system. Although the initial capital expenditure is high for the precipitator, if the total operating and capital costs are amortized over an acceptable period of time, 8 to 10 years, the precipitator will prove to be the. lore economically feasible choice because of its low operating and maintenance costs. 

Fixed capital investments are characterized by the fact that they have to be replaced after a number of years commonly referred to as service life or useful life period. This replacement is not necessarily due to wear and tear of equipment. Other factors include technological advances that may render the equipment obsolete. Furthermore, over the usefiil life of the equipment, the plant should plan to recover the capital cost expenditure. In this regard, the notion of depreciation is useful. Depreciation or amortization is an annual allowance which is set aside to account for the wear, tear, and obsolescence of a process such that by the end of the useful life of the process, enough fund is accumulated to replace the process. The simplest method for determining depreciation is referred to as the straight line method in which... 

Comparatively, the modified reduction-flotation system will have lower annual total cost (amortized capital cost plus O M cost) and will require less space, because the flotation unit is very shallow in depth and thus can be elevated. It is expected, however, that the treatment efficiency of the modified system will be higher due to the fact that the DAF clarifier can separate not only the suspended solids but also organics such as oil and grease, detergent, and so on.57-58-61 Conventional sedimentation clarifiers can separate only insoluble suspended solids. 

Although the energy cost is continuous and the capital costs are one time, it is common to spread out (or amortize) the capital cost over a period of Y years i.e., over the economic lifetime of the pipeline. The reciprocal of this (X = 1/ Y) is the fraction of the total capital cost written off per year. Taking 1 year as the time basis, we can combine the capital cost per year and the energy cost per year to get the total cost (there are other costs, such as maintenance, but these are minor and do not materially influence the result). 

Although the initial capital expenditure is high for the precipitator, if the total operating and capital costs are amortized over 8 to 10 years, the precipitator will prove to be the more economically feasible choice because of its low operating and maintenance costs. 

Objective function. The objective function for the reactor optimization is based on the difference between the value of the product gas (heating value and ammonia value) and the value of the feed gas (as a source of heat only) less the amortization of reactor capital costs. Other operating costs are omitted. As shown in Murase et al., the final consolidation of the objective function terms (corrected here) is... 

The costs of a 10-acre, full-scale, gravel-based constructed wetland used to teat groundwater contaminated with explosive compounds were calculated based on the field demonstration at the U.S. Department of Defense s (DOD s) Milan Army Ammunition Plant near Milan, Tennessee. The estimated, site-specific costs of a 200-gal/min system that discharges effluent to surface waters were 3,466,000 in 1998 dollars. Amortization of these costs was estimated at 1.36 per 1000 gal of effluent for 10 years and 0.45 per 1000 gal for 30 years. Table 1 shows a breakdown of the site-specific estimate. Capital costs for a similar system with groundwater... 

Capital costs are amortized over 10 years at a 7% discount rate. 

In 1992, researchers developed an engineering and costing design for a fixed unit that operated at a rate of 2 tons per hour. Costs were estimated to be 149 (Canadian) per metric ton of soil treated. This estimate was based on the following assumptions the unit used medium naphtha as a solvent operations were 24 hours per day, for 260 days per year utilization factor of the facility was 83% capital costs were 2,548 million (Canadian) and capital amortized over 10 years at 10%, two payments per year. The estimate stipulated that the recovered oil was of suitable quality to be sold to offset process costs. It was estimated that the largest component of process costs would be labor ( 56 per ton of waste treated). Other cost components listed were capitalization costs ( 38 per ton), utilities ( 29 per ton), insurance ( 9 per ton), trucking and maintenance (each 5 per ton), equipment rental and site excavation and restoration (each 3 per ton), and waste disposal was estimated to cost 1 per ton (D17896F, p. 8). 

Initial capital costs not transferable to any subsequent project (well drilling, mobilization, etc.), not amortized over project life. 

Capital costs for equipment to be used at other, future remediation locations, amortized over a 5-year operating lifetime. 

In a 1995 treatability study conducted for the U.S. Department of Energy (DOE) Savannah River facility, a cost estimate was prepared for an FTO system with a flow rate of 400 standard cubic feet per minute (scfm) using natural gas to maintain process temperatures. Costs were estimated at 0.72/lb. For the purposes of this estimate, the inlet concentration was assumed to be 400 ppm of trichloroethylene (TCE), perchloroethylene (PCE), and 1,1,1-trichloroethane (TCA). Capital costs were estimated at 160,000. Capital costs were amortized over 10 years, not over the time required to remediate the site. This cost estimate found FTO to be more cost effective than thermal catalytic technologies due to lower operating and maintenance costs (D125122, p. 10). 

Annual Fixed Charges Interest, amortization of the system capital costs, interim replacement, insurance and taxes.. Overall Performance Accounting for condenser and turbine characteristics. 

The optimization of the large-capacity multistage flash evaporator was based on the consumption of the 370 thermal megawatts of energy available from the nuclear steam generator. It was necessary to determine the capital cost for various assumed terminal temperature differences and numbers of stages. Added to the amortized capital cost were all other costs necessary for operation of a complete plant, such as steam, labor, utilities, materials, and overhead. 

The total costs in electrodialysis are the sum of fixed charges associated with the amortization of the plant capital costs and the plant operating costs. Both the capital costs as well as the plant operating costs per unit product are proportional to the number of ions removed from a feed solution, that is, the concentration difference... 

Capital costs should be added to these costs, calculated for an amortization period of 20 years, 10% yearly interest, annual production of 300,000 t of methanol (plant service factor = 82%), as indicated below ... 

The cost per wafer will depend on many factors. First, the reactor can be quite expensive, so it is a capital item and must be amortized. Also, if the reactor has to be cleaned very frequently or is unreliable and experiences a lot of down time, then this will also add to the capital cost. If the reactants are expensive and not utilized efficiently, then this is another expense item. Energy requirements can be high for heating either the chamber or the susceptor. So, a system with high wafer throughput leads in the direction of lower cost per wafer, provided film quality is acceptable. 

The function to be minimized, the objective function, is the yearly total cost of the piping system—the sum of the amortized capital cost of the pipe and insulation plus the operating costs... 

The amortized capital cost attributable to the low pressure furnace is estimated using the relation... 

To simplify these calculations, the capital cost of the instrument may be amortized over 5 or 6 years and maintenance costs ignored. The average daily cost can then be calculated and will be the same whether the instrument is used or not. Reagent costs are simple to calculate and are usually small in relation to other costs. Examples of labor and equipment costs of 5 commercial flame photometers, used to measure plasma sodium and potassium simultaneously, were given by Broughton and Dawson (B18). With small numbers of analyses, the least expensive instrument was the cheapest to run, but despite wide differences in capital outlay and labor requirements, the cost per analysis for the 5 instruments... 

Total cost is calculated on amortizing the capital cost over 20 yr at 10% interest rate, adding the aimual... 

Includes initial carbon charge. All capital costs were amortized at 5% for 25 yr. ... 

The maximization of the parameter Pr is equivalent to the minimization of the cost in Eq. 18.13, with FeCj, = 0, and xv = SC/ FiC + SC), where FiC is the capital cost (interest plus amortization). Obviously, the capital cost and the production rate have to refer to the same time period. Depending on the proportion of capital cost and operating cost, the optimization of experimental conditions gives different results. 

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