Capitalised costs

Unlike the past work, this work focuses on optimal design and operation of multivessel batch distillation column with fixed product demand and strict product specifications. Both the vapour load and number of stages in each column section are optimised to maximise a profit function. For a ternary mixture, the performance of the multivessel column is also evaluated against that of a conventional batch distillation column. Although the profitability and the annual capitalised cost (investment) of the multivessel column is within 2-3% compared to those of conventional column, the operating cost (an indirect measure of the energy cost and environmental impact) is more than 30% lower for multivessel column. Thus, for a given separation task, multivessel column is more environment friendly. 

Total Capitalised Cost plus first fuel load 1 426 1 775 1 792 2 260... 

Capitalised costs represent the amount of money that should be available for the initial capital investment plus the funds necessary to generate sufficient interest accumulation for the perpetual replacement of the equipment. If the operating costs do not vary, the alternative giving the lowest capitalised costs will be selected. 

The computation of capitalised costs can follow the pattern of annuity payment. The following equation is obtained ... 

K is the capitalised costs, Cy the original cost of equipment, Cr the replacement cost, and Vs the salvage value. Note that (1 + /)" /[(I + i)" -1] is the capitalised-cost factor. 

In all cases of such borrowing, however, the company does not expect the interest to be paid by the project as it comes due, because the project has, as yet, no revenues from which to pay the interest. The lender will be paid its interest from other funds belonging to the company, and the interest due during construction is then turned into a capital sum (capitalised), which is then added to all of the other construction costs. The loan will normally be arranged at a fixed interest rate, so the extra sum can be calculated quite easily. 

U sing this model Dow was able cut its patent tax maintenance obligations by 40 million and other administrative costs by at least 10 million more over ten years. It abandoned (or donated) patents that were no longer of value to the company. The company was able to capitalise on the revenue potential inherent in the patents and estimated that it increased its annual licensing income from 25 million in 1994 to more than 125 million in 1997. 

For a plant with a capital cost of Co, the plant investment cost, C, capitalises the return on investment during construction of the plant -it takes account of expenditure and the required return during the construction period. 

Other costs Capitalised engineering Capitalised spares Venture costs N.Z. development levy Wrap-up insurance Land Total other costs 35.000 3.000 24,500 3,300 10.000 4.000 80,830... 

TOTAL PROJECT COSTS IN 1980 DOLLARS Inflation through July 1985 Estimated interest during construction (capitalised) 886,000 305,860 283,140... 

One of the recurrent features of the commodity chemical industry is its instability or cyclic nature. This is, in large part, due to the tendency for many firms to make investment in new plant simultaneously, to follow a rising market, only to see prices fall when overcapacity results. The conventional view of a world class plant is that it must be big in order to capitalise on the 0.6 power rule, which states that capital costs only increase at (production rate)° as discussed with an example in Chapter 2. Intensified plants, however, with their lower capital costs, should allow smaller-scale plants to compete economically with their standard counterparts. Thus, in following a rising market, the capital investment can be made in smaller increments and be much less risky. This should facilitate a more orderly market development without recurrent bouts of feast and famine . 

Both one-phase and two-phase polymerisation systems lend themselves to continuous polymerisation processes in which all the reactants are fed to the process continually and polymer is removed continually. Continuous processes are particularly useful for the manufacture of high volume products and, although initial capitalisation can be more expensive, operating costs are reduced in comparison to batch or semi-batch processes. 

Another benefit is that especially civil litigation may capitalise the costs of the lack of safety and accountability, and clarify just what is "state-of-the-art" and "state-of-the-industry". So, although litigation is a burden, also promotes progress. 

Volume-driven customers are keen to capitalise on both product and supply chain cost savings in order to pass them on to their customers to drive volume sales. There are two variants of the volume-driven behaviour ... 

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