Land development cost

To calculate several of the cost items listed in Table 2.1, requires the depreciable and fixed capital costs. The depreciable capital cost is the capital required for equipment and its installation or modification in the process, and all the facilities required to operate the process. There is some variation in the definition of fixed capital cost. References [1-5], define the fixed capital as consisting of the depreciable capital cost, land cost, and site or land development cost. Woods [10], however, omits land cost and land development cost so that that the fixed capital cost equals the depreciable capital cost. We will adopt the first definition here. For now, assume that we know the depreciable capital cost. We will develop a procedure for its evaluation later. In Example 2.1 estimate the production cost using Table 2.1. 

Land Development Cost Total Raw Material Cost... 

According to Table 2.1, the fixed capital cost equals the sum of the depreciable capital cost, land cost, and land development cost. Land cost is 0.015 times the depreciable capital cost and land development is 0.0211 times the depreciable capital cost for a fluid processing plant. Thus,... 

Land development cost, which is not depreciable, consists of such items as site clearing, constmction of roads, walkways, raihoads, fences, parking lots, wharves, piers, recreational areas, and landscaping. Presumably, these items improve the value of the land, and their costs, to a certain extent, are recoverable. Table 2.17 lists land development cost for three process types as a fraction of the depreciable capital cost. 

Table 2.17 Factors for Estimating Land-Development Cost...

However, Lynn and Howland included in the fixed-capital cost not only money invested in production and storage facilities but also that invested in land, research and development costs, and any auxiliary facihties necessaiy to support the process. Typical values of capit ratios for the year 1958 are listed in Table 9-49. 

The philosophy of process intensification has been traditionally characterized by four words smaller, cheaper, safer, slicker. And indeed, equipment size, land use costs, and process safety are among the most important PI incentives. But process intensification can (and should) also be placed in a broader context—the context of sustainable technological development. Several years ago DSM published a picture symbolizing its own vision of process intensification (32), in which skyscraping distillation towers of the naphtha-cracking unit are replaced by a compact, clean, and tidy indoor plant (see Figure 3). The importance of PI for sustainable development and its role in the company s responsible business has been further stressed in a recent publication by the company s CEO, Peter Elverding (33). Here,... 

Social Cost of Alternative Land Development Scenarios Snow Cover Extent... 

There are several depreciation methods, which are discussed in many economic tercts. Since we want to develop a rapid method of estimating the production cost, we will use the simple linear depreciation method. For this method, divide the difference of the depreciable capital cost and its salvage value by the Ufe of the plant, as shown in Table 2.1. An entire plant or individual equipment has three lives an economic life, a physical life, and a tax life. The economic hfe occurs when a plant becomes obsolete, a physical hfe when a plant becomes too costly to maintain, and a tax life, which is fixed by the government. The plant life is usually ten to twenty years. The depreciable capital cost includes all the costs incurred in building a plant up to the point where the plant is ready to produce, except land and site-development costs. Care must be taken not to include costs that are not depreciable. 

The total capital cost consists of the depreciable capital cost, land cost, land or site development cost, startup cost, and working capital. In theory, land cost is completely recoverable when a plant shuts down, and Uherefore is not depreciable. Land cost varies from 0.01 to 0.02 times the depreciable capital cost. Use an average value of 0.015. 

Stop-loss insurance provides protection to those involved in land development such that they can insure for the potential extra costs associated with planned remediation. In order to obtain this insurance, considerable review of the site investigation reports and the cost estimation has to be undertaken in order to get an acceptable degree of comfort regarding the risks involved. 

Land purchases and many of the costs associated with faciUty development can be accompHshed with long-term loans of 15 to 30 years. Equipment such as pumps and tmcks are usually depreciated over a few years and are funded with shorter-term loans. Operating expenses for such items as feed, chemicals, fuel, utilities, salaries, taxes, and insurance may require periodic short-term loans to keep the business solvent. The projected income should be based on a reaUstic estimate of farmgate value of the product and an accurate assessment of anticipated production. Each business plan should project income and expenses projected over the term of all loans in order to demonstrate to the lending agency or venture capitaUst that there is a high probabiUty the investment will be repaid. 

Is there a working development plan Cost of suitable land... 

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