Engineering economics operating expenses

Volume-based solubilities are crucial data used in engineering and economic models in the design of industrial gas treating processes [1]. The amount of solvent required or solvent flow rate (e.g., L/min, etc.) is often the first consideration for projecting process capital and operating expenses, as the size of the process will be directly proportional to the flow rate of solvent [1]. Thus, one consideration of determining whether ILs can be competitive with organic solvents for H S removal is the relative solubihty of H S as it will directly impact the process scale and economics. 

Engineering economics is the critical criterion to consider early in design, process improvement, and troublshooting. In this section, we review the role of economics in financial reporting through the balance sheet and the income statement, options for measuring financial attractiveness, operating expense estimation, and capital cost estimation. 

The generalized economic analysis expression in Eq. (11.1) is particularly adapted to corrosion engineering problems. Given the numerous uncertainties associated with most corrosion problems this equation can provide fairly good estimates of prevention and control alternatives. This equation takes into account the influence of taxes, straight-line depreciation, operating expenses, and salvage value in the calculation of present worth and annual cost [11]. 

Depreciation. Depreciation arises from two causes deterioration and outdatedness (economically). These two causes do not necessarily operate at the same rate, and the one having the faster rate determines the economic life of the project. Depreciation is an expense, and there are several permissible ways of allocating it. For engineering purposes, depreciation is usually calculated by the straight-line method for the economic life of the project. Frequently, economic lives of 10 years or less are assumed for projects of less than 250,000. 

Expenses, as outlined in Chap. 8, for various types of taxes and insurance can materially affect the economic situation for any industrial process. Because modem taxes may amount to a major portion of a manufacturing firm s net earnings, it is essential that the chemical engineer be conversant with the fundamentals of taxation. For example, income taxes apply differently to projects with different proportions of fixed and working capital. Profitability, therefore, should be based on income after taxes. Insurance costs, on the other hand, are normally only a small part of the total operational expenditure of an industrial enterprise however, before any operation can be carried out on a sound economic basis, it is necessary to determine the insurance requirements to provide adequate coverage against unpredictable emergencies or developments. 

The key words to the future of methanol/gasoline blends for automotive use are need and availability. Technically, the operation of methanol/gasoline blends in automotive engines is feasible with some associated problems. Economically, methanol is not yet competitive with gasoline produced from petroleum, hence the need has not been strongly established. Since the need or market is not established, the capital expenses involved in producing methanol from coal or garbage are not presently justified. However, if 40-60% of the crude oil used in the U.S. to produce petroleum products should suddenly become unavailable, the need would be very real. The necessity of compete evaluation of methanol and other alternate fuels is evident. 

Each step in the recipe must be translated into large-scale operation, First, each must be technically feasible, that is. engineering counterparts must exist for laboratory procedures. Equipment is usually no problem/ but maintaining the controlling conditions may be. Second, scale-up must be economical. The most important factor here is capital investment to acquire facilities for what may be large quantities. Purity levels of reagents is another issue which requires attention. Large quantities of very pure feedstocks may be expensive or even unattainable. 

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