Capital recovery factor calculation

For the cost of local pipelines the total length must be considered, so the average length of each local pipeline must be multiplied by the number of local pipelines to determine the total capital cost. The total capital cost of the pipeline and the compressors are then annualized using the pipeline capital recovery factor, calculated in the model. 

This is then converted to annualized capital costs (ACC) with the use of the capital recovery factor (CRF), which can be calculated from the following equation ... 

The CCE spreads the investment over the lifetime of the measure into equal annual payments with the familiar capital recovery factor. The annual payment is then divided by the annual energy savings to yield a cost of saving a unit of energy. It is calculated using the following formula ... 

Calculate the capital recovery factor. In this method, each of the undiscounted net cash flows (NCFs) for years 1 to 20 is algebraically added to the capital recovery cost (CRC) to obtain the equivalent uniform annual revenue (EUAR). The CRC is the product of the total capital investment,... 

TCI, and the capital recovery factor, CRF, which is defined and calculated by Eq. (18.7) of the introduction. The project with the higher EUAR will be the one to fund. The pertinent input data are as follows ... 

Determine the EUAR for each option, assuming a 6% hurdle rate. Following the procedure of Example 18.7, calculate for each option the undiscounted net cash flow, the capital recovery factor, the capital recovery cost, and the EUAR. The results are as follows ... 

The annual operation costs of an outdated environmental control device is 75,000. Under a proposed emission reduction plan, the installation of a new processing system will require an initial cost of 150,000 and an annual operating cost of 15,000 for the first 5 years. Determine the annualized cost for the new processing system by assuming the system has only 5 years (n) operational life. The interest rate (0 is 7%. The capital recovery factor (CRF) or annual payment of a capital investment can be calculated as follows ... 

A template for calculating cost of electricity has been developed. The analysis considers efficiency, capital costs, operating and maintenance costs, capital recovery factor, availability, fuel price and other factors. A detailed economic analysis will be performed. 

Depreciation follows the United States Modified Accelerated Cost Recovery System (MACRS). Under IRS regulations, most utility-type investments use either a 15- or 20-year depreciation schedule. Certain investments, such as renewables, are allowed to use a 5-year depreciation schedule. The capital recovery factor (CRF) is calculated using... 

Table 27.9, a table of capital recovery factors, enables us to calculate the equivalent uniform annual cost (EUAC). The 120,000 figure is our base (No. 1 in Table 27.9). In conventional accounting, this would likely determine the capital charge the department manager would see on the income statement if the company used straight-line depreciation. It represents only depreciation of the asset. Using a 15 percent cost of capital...

Total annual cost (objective function) TAC = cCeq + C p where the Capital Recovery Factor is calculated (T17.3)... 

If machine a has a salvage value of 2,000 while machine P still has no salvage value, the calculation of/ for machine a must be changed. The capital recovery factor (0.188) should be applied to only the part of the initial investment that will not be recovered ( 12,000 - 2,000 = 10,000) while only the interest need be paid each year on the 2,000 that is recovered at the end in salvage. Thus, the item 2,250 that appears in the a column should be replaced by [(0.188)(10,000) + 0.1(2,000) = 2,080] and the total becomes 4,430. Machine a now represents a more attractive purchase than machine p. 

From a point of view of industrial protein production the number of sequential operations necessary to achieve the desired purity of a protein contributes significantly to the overall costs of the downstream process. This is on one hand due to the capital investment and amount of consumables needed for each step as well as to the individual time requirements of each operation, as labour costs are a very important factor in the calculation of process economics. Secondly the overall yield of the purification is reduced with each additional process step, originating from its inherent loss of product. Furthermore, fast primary recovery should separate the protein of interest from process conditions detrimental to its structural stability, e.g. proteases, glycosidases, or oxidizing conditions. As the performance of the purification process, expressed by its overall yield, operation time, and capital cost may contribute to up to 80% of the total production costs [2], it is evident, that a reduction of the number of sequential steps in a purification protocol may be the key to the economic success of a potential protein product [3],... 

Another key factor for successful cost targeting is capital cost estimation. Capital costs for heat recovery systems include costs for heat exchangers, heaters, and coolers. Improper estimates of capital cost can lead to suboptimal trade-offs between capital and utility costs. One important aspect is good estimates of heat transfer coefficients for individual process streams since heat transfer coefficients determine the size and surface area of heat exchangers. A second consideration for accurate capital costs is realistic cost calculation for process furnaces and cooling towers in the targeting phase of work— these are much more expensive than heat exchangers. 

The installation of a Norelco recondensing system was estimated at 65, 000 with approximately 4,000 calculated as the annual cost of operating the recovery system. Based on annual fixed charges of 28 per cent of capital investment, the net profit to the storage facility is calculated at 37, 000 annually on an incremental investment of 20,000, Thus, in special applications where the static heat leak to the tank is not the only loss factor, the combined use of a tank with less effective insulation and a vapor recovery system could effect large savings for the installation. 

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