Investment of capital construction

In the organic synthesis, the consumption of raw materials accoimts for 50% 80% of the production cost, so the selectivity of catalyst affecting the consmnption of raw materials has a huge economic significance. For example, the cost of aU equipment accounts for about 1% of the jdeld of ethylene oxide for production equipment of ethylene oxide with capacity of 50 kt. The increase in the cataljdic selectivity sometimes can be represented in saving the investment of capital construction and the energy consumption of the separation process. 

It is necessary to consider the effect of catal dic activity on the reactor volume when a new device is designed. If the improvement of catalytic activity cannot lead to a fundamental change of the technology, the obtained economic benefits will be smaller. Investment of capital construction accounts for about 10% of the... 

The unit consumption of the catalyst as its cost can determine its ratio accounting for the production cost. The frequency of replacement and regeneration of catalyst will affect the service time of the equipment, and then affect the reclaiming of investment of capital construction and maintenance expenditure. 

As an example, a new product has arisen from research, which is exciting but is one that would require an investment of capital way beyond the means of the company. The capital required is for the construction of a suitable plant and also for the extra staff needed to develop the product to a state ready for launch into the market. 

METHOD E POWER FACTOR APPLIED TO PLANT-CAPACITY RATIO. This method for study or order-of-magnitude estimates relates the fixed-capital investment of a new process plant to the fixed-capital investment of similar previously constructed plants by an exponential power ratio. That is, for certain similar process plant configurations, the fixed-capital investment of the new facility is equal to the fixed-capital investment of the constructed facility C multiplied by the ratio R, defined as the capacity of the new facility divided by the capacity of the old, raised to a power x. This power has been found to average between 0.6 and 0.7 for many process facilities. Table 19 gives the capacity power factor (x) for various kinds of processing plants. 

The catal3dic activity determines the unit productivity of the reactor, and the investment of capital to construct the reactor. Increase in the catal3dic activity can decline... 

If more active catalysts are used i.e. the catalyst has more productivity, resulting in fewer numbers of parallel production lines, then there is a possibility of saving investment in capital construction. 

Factors that enter into any economic analysis of handhng-warehousing systems are (1) expected mechanical and economic life of the system (2) annual maintenance cost (3) capital requirements and expected return on investment (4) building-construction cost and land v ue (5) detailed analysis of each work position (to determine trade-offs of labor and equipment expected future costs and availability of labor are important) (6) relation of system control and personnel used in system (trade-offs of people versus mechanical control) (7) type of information system (computerized or manual) and (8) expected changed in product, container, unit pallet loads, and customer preferences during the life of the system. 

An old variation of the conversion type is a catalytic combination unit. Development of this scheme was necessitated by the rising cost of refinery construction after World War II and by the great demand for capital for postwar expansion. The scheme reduced the investment and operating costs for refining equipment. The basic feature of the combination unit lies in the integration of the fractionation facilities of the reduced crude distillation and catalytic cracking sections. 

Although there is quite a strong research effort in both the private and governmental sectors, especially in the United States, no firm plans to construct commercial Fischer-Tropsch plants have been announced. Nevertheless, several coal-conversion pilot plants are in an advanced stage of development, and conceptual designs, together with economic evaluations, have been produced for plants capable of processing 140,000 tons of coal per day (20). Such plants would involve a fixed capital investment of some 2.8 billion (1975 estimate) (2/). 

In this study, the discount rate was set at 8%, the operational life of the plant was chosen at 30 years, and the load factor was taken as 80% without specific consideration for start-up or shutdown phases. The construction period was assumed to last for three years, which leads to adding an interest cost, along with other contributions such as general facilities and engineering and contractor fees, to the process unit investment cost mentioned above. The final investment cost for an Nth of a kind plant was calculated by considering a learning effect leading to a reduction of 30% of capital costs. 

To determine the required selling price of hydrogen, a cash flow analysis was performed using an after-tax internal rate of return (IRR) of 15%. Other major assumptions used in the analysis were equity financing for a 20 year plant life including two years of construction time, a 90% on-stream factor with 50% plant capacity in first year of production, 30% of capital investment is spent in the first year and 70% in the second year, a tax rate of 37%, and ten year straight-line depreciation. 

Correction factors for operating pressure, operating temperature, and material of construction to apply for fixed-capital investment of major plant itemstt... 

The levelized prices of PV electricity and H2 are derived by net present value cash flow analysis. The net present value cash flow method is described in Appendix A.l. A straight tine, ten-year depreciation schedule is applied with an annual depreciation rate of 9% of capital. The levelized PV electricity and H2 prices are derived by choosing PV electricity and H2 prices to generate a revenue level that results in a cumulative, net cash flow stream with a 0 net present value over the thirty-year capital recovery period. The annual net cash flow streams are discounted at the present value of the 6%-discount rate. Investment funds are allocated in year 1 construction occurs in year 2 and H2 cash flow begins in year 3. The modular design of PV electrolysis plants and H2 distribution systems enables the rapid initiation of H2 marketing and cash flow. 

Since PV electrolysis plants are modular in design, it is possible to couple the expansion of PV electrolysis plants to growth in the FCV market. The creation of a H2 production and distribution system is contingent on the development of a working partnership between PV, electrolyser, automobile, pipeline, metal mining and retail fuel companies. The capital investments required for the construction of a PV electrolytic H2 production and distribution system is comparable to the capital investments in the construction of the cable and satellite infrastructure for the information technology industries in the latter part of the 20th century. 

The largest component of the constant C is the return on investment of the fixed capital. In order to make comparisons easier, a standardised methodology is adopted which is detailed in the Appendix. Typically process plants are assumed to take a similar (3 year) construction period to operate at full output over the project lifetime with zero residual value. The capital payback is then over this operating life. 

The fixed capital investment is the total cost of designing, constructing, and installing a plant and the associated modifications needed to prepare the plant site. The fixed capital investment is made up of... 

The construction and operation of chemical plants require large amounts of capital. Corporations engaged in the production of chemicals must raise the finances to support such investments. Like taxation, corporate financing is a specialized subject with many intricacies that require expert knowledge. The design engineer needs a superficial awareness of this subject to carry out economic analysis and optimization of the design. 

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