Startup cost

Startup costs are defined as the total of those costs directly related to bringing a new production facility into operation. They should not include the costs of entering or expanding a business. Hence startup costs include the following ... 

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 ... 

In the first year, the startup costs are substantial (10% of the capital in our case 3 million dollars). The profit for the first year is, therefore, not 5.4 to 115 million dollars but 2.4 to 85 million dollars. 

SAQ 8.7 The product value at 100% capadty will now be (total cost of production + 7 to 15% ROD, ie 16.04 to 1654 + 1.12 to 2.48. So the minimum product value will be 17.16 per kg of L-phenylalanine and the maximum product value 19.02 per kg of L-phenylalanine. It is rattier difficult to say whether this fictitious process would survive or could compete. Actual data are absolutely necessary. On the other hand this exercise gives us a better understanding of process economics and can also be used to compare a fermentative process for the production of amino adds with, for example, a chemo-enzymatic process. Calculate the return on investment over a 15 year period for an amino add fermentation, based on the following data and assumptions. Production capadty = 500 tonnes per annum Selling price of product = 50 kg Cost price of product = 24.5 kg 1 Capital = 40 million Taxes = 50%. Assumptions Cost of dealer discount, distribution and freight = 20% total sales Startup costs = 10% of capital Working capital = 25% of net sales Administration plus R and D costs = 12.5% of net sales. 

The following costs are preliminary bench-scale startup costs for the STRATEX technology [D14167D, p. 6 Personal communication Michael Mann, ARCADES Geraghty and Miller, Inc. (formerly Alternative Remedial Technologies, Inc.), December 1996] ... 

In 1994, Pacific Northwest Laboratories (PNL) estimated that a DC arc melter manufactured by EPI, capable of treating 1.5 to 2 tons per hour would have a startup cost of approximately 2 million (D116154, p. 4). 

Full process control computerization for a multipurpose plant is much more complex and therefore will be also be much more expensive than for a dedicated single-product plant. Whenever possible, all efforts have to be made to choose standard process control systems and to apply standard control software this is a proven measure to control the investment costs in this segment and will also minimize the risk of having excessive investment and startup costs due to initiating problems with the computer control system. 

The Problem You decide to go into the sandal-making business. Your startup costs are 1,600, and it costs you 40 per pair of sandals to produce them. You write your total cost function as C = 1,600 + 40x, where x is the number of pairs of sandals that you produce. The price at which you sell the sandals is dependent on the number of pairs you sell, so there isn t a fixed price (you lower the price to be able to sell more). In this case, the amount of revenue you get from selling x pairs of sandals is found with R = lOOx - 0.5x2. What is the break-even point How many pairs of sandals do you have to produce and sell to start making a profit ... 

Reduced startup costs/less risk Less time required to show a profit Buyer receives established goodwill Business has an established clientele Business provides buyer with trained employees, inventory, physical facilities, and established relationships area healthcare providers... 

Notes should be included with the table to explain the basis for special factors used, such as escalation factors, startup costs, and depreciation method. The notes can also be used to explain the methods used for estimating the various items as, for example, note 4 in Table 2 showing the methods used for estimating lines 5, 6, and 7. 

Special startup costs for the first year only are 10 percent of the F.C.I. 

If you elect to buy an existing business rather than build from the ground up, you will need less in startup costs of time, money and energy. Your cash flow will start immediately because you will have existing inventory, receivables and regular customers. 

Salary of payroll staff — Vj hour — to set up new hire on payroll Startup costs (business cards, office supplies, computer, etc.) ... 

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. 

Cost of dealer discount, distribution and frei t = 20% total sales Startup costs = 10% of capital Working capital = 25% of net salra Administration plus R and D costs = 12.5% dt net sales. 

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