Shared Capital Expense

Capital is required to meet both miming expenses and particnlarly new capital items. Sources are usually retained profits, equity (share capital) and borrowings. 

The monies in the Expense Account will not be drawn until the share capitalization costs of the Issuer (equal to 124,000) are used up to cover such expenses. Thereafter as invoices become due and payable monies will be drawn and on each Interest Payment Date (and to the extent there are sufficient funds), to the extent that the Expense Account balance is below 25,000, monies will be applied from distribution to replenish to 50,000. 

At processing complexes, central utiUties and other faciUties are shared by several battery-limits process plants. The capital cost of a central utiUty is sometimes charged to the capital cost of each battery-limits plant as an allocated capital cost based on the unit capital cost of the utiUty faciUty and the units of capacity of the utiUty required by the plant. In this case, the use charge per unit consumed only covers operating expenses. The alternative is to recover utihty capital costs, as well as operating expense, in the unit usage charge. 

This emphasis on marketing is also capital-intensive. Formulators now spend millions of dollars on television advertising where traditionally retailers shouldered such expenses. After purchasing a new pesticide line, Scotts Company spent twice as much as its former owner to advertise it. In 1998, with only about half the market share in yard care supplies, the company spent 75% of all the advertising dollars in the sector, and purchased 8 million of television airtime in 2002. ... 

Secondly, there is variable expenditure (production, recurrent, working or operating costs) which includes the costs of supplies and stocks of raw materials, emphasising the need for efficient monitoring of the mass-balance of the process, energy, labour and overheads. Overheads include direct overheads such as rates, insurance, administrative staff etc. and indirect overheads such as a share in head office salaries and upkeep. This is an important distinction because whereas local management can have little direct influence in overheads costs and capital and utility expenses, they can have a big control over variable expenditure. 

Many factors act together to determine the optimum scale of a process. These include the demand for the product, competitors share of the market, any technical limitations on the size of operation and also economies of scale effects. There is an approximate logarithmic relationship between the unit production costs for a product and the volume of production, whereby considerable economies of scale can be achieved. If the costs of a process of one size (C ) is known then the costs of larger or smaller factories (C ) can be approximately obtained from the relationship C = Cx (or n° ), where n is the scale-up ratio, i.e. n=l for a plant that is twice as big. Alternatively, a graph of log capital costs vs. log of plant capacity gives a straight line with a slope equal to the scale-up factor (n). The power term varies from case to case, but is invariably less than one. This scale effect is one reason why unit production costs are inversely proportional to the scale of manufacture. For example, most amino acids are expensive and can only be used in... 

All pharmaceutical companies with NHS brand-name drug sales over 500,000 are included in the Scheme, but only firms with sales over 4 million must submit financial records for a yearly assessment of their allowable profit rates (44). These 65 or so companies provide audited annual financial reports that document their total sales to the NHS including expenses for manufacturing, distribution, promotion, and R D associated with those sales, and the capital employed in generating the NHS sales. At most, 9 percent of a company s total NHS sales may be claimed for promotional expenses, but an additional allowance is made for informational activities (386). The PPRS attempts to pay for its share of R D by allowing firms to apply their worldwide ratio of R D... 

In general, neutron activation analysis is expensive when compared to other techniques. Capital costs mentioned in the literature vary from somewhere between US 300 000 and US 1 000 000 for a low- (Guinn and Hoste, 1980) up to US 5 000 000 for a high-flux research type nuclear reactor (Bowen. 1981) in addition, the latter can have total annual running costs of US 500 000 (Bowen, 1981) up to US 1 000 000 (Been and Piste, 1984). To reduce the expenses, a nuclear reactor is very often shared by various departments in a university or various institutions and industries in a large area. 

Simplified versions of the Fig. 5.8d arrangement are common some are described elsewhere (68). In some cases, the purge lines split downstream of a shared rotameter and needle valve. An even simpler system replaces the pressure regulator, rotameters, and needle valves by a restriction orifice in each line. Although the simplified systems save capital and can be made to work, the simplifications are achieved at the expense of more troublesome operation, and the author would not recommend them. 

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