Total capital investment

There is also, however, an increasing resistance by local communities to siting new plants in many of these European areas. Moreover, the environmental regulations have become increasingly stringent in Germany, the Netherlands, and Erance. It is estimated that the environment and other safety-related costs in Germany have risen to the point where 30% of the total capital investment needed is for environmental and safety measures. 

The most common approach to fixed cost estimation iavolves the use of a capital recovery factor to give the annual depreciation and return on capital. This factor typically is between 15 and 20% of the total capital investment. Property taxes are taken as 1—5% of the fixed capital and iasurance is assumed to be 1—2% of the fixed capital. If annual depreciation is estimated separately, it is assumed to be about 10% of the fixed capital investment. The annual iaterest expense is sometimes neglected as an expense ia preliminary studies. Some economists even beHeve that iaterest should be treated as a return on capital and not as part of the manufactufing expense. 

Fig. 1. Annual money flows diagram. Outflows are to the left, ie, total capital investment, and are negative. Inflows are to the right, ie, sales revenues, and...

Since different meanings are ascribed to both annual profit and invested capital in Eq. (9-25), it is important to define the terms precisely. The invested capital may refer to the original total capital investment, the depreciated investment, the average investment, the current value of the investment, or something else. The annual profit may refer to the net annual profit before tax A vp, the net annual profit after tax Awp, the annual cash income before tax Aci, or the annual cash income after tax A vcf... 

Total Capital Cost The installed cost of the fixed-capital investment Cpc is obviously an essential item which must be forecast before an investment decision can be made. It forms pai4 of the total capital investment Cfc, defined by Eq. (9-14). The fixed-capital investment is usually regarded as the capital needed to provide all the depreciable facihties. It is sometimes divided into two classes by defining battery limits and auxiliaiy facilities for the project. The boundary for batteiy limits includes all manufacturing equipment but excludes administrative offices, storage areas, utihties, and other essential and nonessential auxihaiy facilities. 

The total capital investment of a process is defined as follows ... 

Total capital investment = Fixed capital investment... 

Total capital investment = 193,700 -I- 0.15 Total capital investment, i.e., total capital investment = 227,900. 

Adsorption and condensation are the normal recovery options. If recycling is considered and is economically feasible, consideration of incinerators as destruction devices may be unnecessary. Generally, recovery units like adsorbers and absorbers result in higher total capital investment than modular, packaged incinerators. 

The return on investment is the expected profit divided by the total capital invested. This is the percentage return that an investor may expect to eventually earn on his money. Since the federal corporate income tax rate is around 48% on all profits, it must be stated whether the profit is the before- or after-tax earnings. 

The return on investment is derived from the ratio of the total capital invested and the turnover to profit ... 

After installation, the total cost of equipment (direct permanent investment) is 6,557,000. Allowing 18% for the cost of contingencies and contractor fees ( 1,180,300), the total depreciable capital is estimated to be 7,737,000. Ten percent of this is assumed to cover the cost of startup, 773,700, giving a total permanent investment of 8,511,000. Working capital is estimated to cover accounts receivable that is, the sales of 30 days production of wafers (41,800 wafers), assumed to sell for 260/wafer, giving 10,868,000. Together with a 2-day inventory of wafers, valued at the product price, the total working capital is 11,520,000. Hence, the total capital investment is 20,031,000. 

The formation of prepolymer can also be achieved by transesterification of dimethyl terephthalate (DMT) with EG, releasing the by-product methanol. High-purity DMT is easily obtained by distillation and in the early years of PET production, all processes were based on this feedstock. During the late 1960s, highly purified TPA was produced for the first time on an industrial scale by re-crystallization. Since then, more and more processes have shifted to TPA as the feedstock and today more than 70 % of global PET production is based on TPA. The TPA-based PET production saves approximately 8 % of total capital investment and 15% of feedstock cost (Figure 2.1). 

The total capital investment includes funds required to purchase land, design and purchase equipment, structures, and buildings as well as to bring the facility into operation (Couper, 2003). The following is a list of items constituting the total capital investment ... 

Study Method The single-factor method begins with collecting the delivered cost of various items of equipment and applying one factor to obtain the battery-hmits (BL) fixed capital (FC) investment or total capital investment as follows ... 

Fixed capital investment Working capital requirements Total capital investment Total manufacturing expense Packaging and in-plant expense Total product expense General overhead expense Total operating expense Marketing data Cash flow analysis Project profitability Sensitivity analysis Uncertainty analysis... 

Catalysts and chemicals Licenses, patents, etc. Total capital investment Income statement Income Expenses... 

Other templates may be prepared for total capital investment, working capital, total product expense, general overhead expense, and casn flow. Table 9-29 may be used to organize cash flow data by showing investment, operating expenses, cash flow, and cumulative cash flow. 

It is now possible to compute the after-tax rate of return, which is the net annual profit after tax, divided by the total capital investment (fixed capital costs plus working capital), multiplied by 100. In the case presented here, the after-tax rate of return is 18.16%. 

Two other measures that can be used to evaluate the profitability of a product are the return on investment and the payback period. The return on investment (ROZ) is the expected profit divided by the total capital invested, expressed as a percentage return. It must be clearly stated whether the profit is based on pre-tax or after-tax earnings. The after-tax ROI is compared with the earnings that could be achieved by an alternative investment, e.g. capital bonds. An after-tax ROI of at least 15-20% is usually expected (or 30-40% pre-tax ROI), assuming that the project is not particularly risky ... 

The total capital investment associated with feed handling, pretreatment, neutralization/conditioning, saccharification, and filtrationis amortized over the 20-yr design life of the plant at a fractional interest rate of 10%. Annual labor costs are estimated by NREL to be 2,150,000 (2). These costs were estimated using data from similar ethanol plants. 

Except for shell and tube exchangers, purchased costs were estimated by means of charts from the Chauvel Method (Chauvel, 2000), then multiplied by correcting factors (materials for example). Other charts have then been used for purchased costs, the second step requiring correcting factors being the same as previously. These different methods show finally various results with a decrease of about 24% of the total capital investment (Peters, 2003 Ulrich, 2004). 

Daily Number of Btu Output Gasifier Vessels Total Capital Investment Required jLiivea lmt ul Per Million Btu/Day-90% OF... 

At the optimum reflux ratio, the reboiler and condenser represent 21% and 12% of the total capital investment. Similarly, at optimum design, the fuel costs, steam and cooling water, represent 64% and 8% of total system costs. 

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