Fixed-capital-cost estimation estimates

The first stage toward producing an accurate estimate is to use a standard cost code for all construction projects. Table 9-45 shows a suitable numerical cost code, and Table 9-46 shows a typical alphabetical-numerical code. The cost-code system can be used throughout the estimating and construction stages for the collection of cost data by manual or computer methods. There are numerous types of fixed-capital-cost estimates, but in 1958 the American Association of Cost Engineers defined five types as follows ... 

TABLE 9-44 Checklist of Items for Fixed-Capital-Cost Estimates... 

Quality of Estimates Capital cost estimation is more art than science. An estimator mnst nse considerable jndgment in preparing the estimate, and as the estimator gains experience, the accnracy of the estimate improves. There are several types of fixed capital cost estimates ... 

In our example, we obtained a rather precise fixed-capital cost estimate from a private industry with high-pressure-technology experience. This estimate, updated to year 2000, was of 600,000 EUR for the plant sketched in Fig. 8.3-2, including all costs listed in the above paragraph. In case a distillation tower was needed to obtain pure CO2 for recycling, the chemical plant would be more expensive because a flash-type separator would be substituted with a distillation tower, with boiler and condenser. 

Capital investment is divided into two parts (1) fixed capital (2) working capital. A fixed capital cost estimate is useful in determining maintenance and depreciation charges under operating costs and it is a necessity in making economic analyses such as return on investment. The working capital (10 to 15 per cent of fixed capital) is the less critical, economically speaking. 

Equipment Costs. Methods 3, 4, and 5 under fixed capital cost estimating methods require equipment cost estimates based on published references. Table 4-G is an index of cost sources for process equipment. In the next few pages of this chapter there are presented Figures 6-3 to C-30, which are installed cost data derived largely from Chilton or Aries and Newton. Arrangement is by alphabetical order of equipment titles,... 

Fixed-capital cost estimating Catalysis Today 34(1997)457 - 467. 

Total fixed capital cost estimation, total fixed capital investment = 3 to 10 (4 to 5 usual) X FOB major pieces of equipment. The factor decreases as more alloys are used in the process. 

The capital cost estimates are generated by the Engineering function, often based on 50/50 estimates (equal probability of cost overrun and underrun). It is recommended that the operating expenditure is estimated based on the specific activities estimated during the field lifetime (e.g. number of workovers, number of replacement items, cost of forecast manpower requirements). In the absence of this detail it is common, though often inaccurate, to assume that the opex will be composed of two elements fixed opex and variable opex. 

Annual iadirect costs are estimated as percentages of the direct labor and fixed capital costs. Typical direct labor percentage ranges are 25—30% for payroll overhead, 15—20% for stores and suppHes, 10—20% for control laboratory, 10—20% for security, 10% for yard, and 10—15% for process improvements. That is, total iadirect costs are usually 80—115% of the direct labor cost (1). 

The estimated (DCFRR) and the estimated (NPV) are both functions of the estimated cumulative revenue from annual sales X As, the estimated cumulative total annual cost or expense X Ate, and the estimated fixed capital cost Cfc of the plant. The revenue from annual sales for each year is in turn the product of the sales price and sales volume. Initially it is desirable to select those values from the distribution cui ves of X As, X Ate, and Cfc which enable the maximum and minimum (DCFRR) and (NPV) to be calculated. 

Rapid Manufacturing-Cost Estimates Fixed manufacturing costs are a func tion of the fixed-capital investment and are independent of the production rate of the plant. Property taxes or rates depend on location. They may be taken as 2 percent of the fixed-capital cost of the plant in the absence of specific data. The cost of insurance depends on both location and the hazardous nature of the materials handled. This cost is normally of the order of 1 percent of the fixed-capital cost of the plant. 

Equipment Costs The cost of dehvered equipment forms the basis of most methods of estimating the fixed-capital cost. The equipment required can usually be divided into (1) processing equipment, (2) equipment for handling and storage of raw materials, and (3) finished products handling and storage equipment. 

For control purposes it is advisable to estimate startup cost and time beforehand and then try to stay within the estimates. Tne general parameters which can be used to estimate startup cost Csu, which are usually between 2 and 20 percent of the batteiy-limit fixed-capital cost, are as follows ... 

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