Fixed capital investment detailed estimate method

Two general methods have been used to estimate piping costs when detailed flow sheets are not available. One method is to use a percentage of the FOB equipment costs or a percentage of the fixed capital investment. Typical figures are 80 to 100 percent of the FOB equipment costs or 20 to 30 percent of the fixed capital investment. This method is used... 

Results obtained using this procedure have shown high correlation with fixed-capital investment estimates that have been obtained with more detailed techniques. Properly used, these factoring methods can yield quick fixed-capital investment requirements with accuracies sufficient for most economic-evaluation purposes. 

The fixed capital investment is the cost to build the manufacturing facility. Corresponding to the different levels in the gating process given in Table 16.1 are methods of cost estimation that have different levels of accuracy. Here we describe estimation methods for the conceptual design stages that use process cost correlations (which are usually accurate to 40 to 50%) and the bare module factor method ( 30%). Some estimation methods provide improved accuracy but require vendor quotations detailed estimates of material costs of piping, valves, and insulation and estimates of installation labor hours and the mix of labor rates. Such methods are beyond the scope of this chapter. 

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