College of Engineering and Architecture

Department of Chemical and Petrochemical Engineering

Spring 2013- 2014 Semester

INTERM II EXAM

CHPE 308 Engineering Economy

Date: April 24, 2014

Time: 2:00 – 2:50 PM

Venue: 2A- 1

Faculty: Dr. Hazim Fadhil Abbas

1.  Answer all two questions

2.  Write answer on exam papers.

3.  Write only in pen (black or blue).

4.  Use a standard scientific calculator. No cellphones allowed.

Student Name: Student ID:

Q1:

The after-tax nondiscounted cash flows for a new chemical process are shown in table Q1. Using these data, calculate the following:

a.  Discounted payback period (DPBP) [25 Marks]

b.  Present value ratio (PVR) [25 Marks]

Use a 10% discount rate.

Table Q1: Nondiscounted cash flow calculations (All figures are in $ millions)

End of year / Capital investment / Depreciation allowance / Revenue from sales / Total annual costs / Net profit / Income tax / Net profit after tax / After-tax cash flow
0 / (10)*, ** / (10)
1 / (25) / (25)
2 / (25) / (20)
3 / (15+20)+, ++ / (35)
4 / 8.75 / 60 / 50 / 10 / 3.80 / 6.20 / 14.77
5 / 8.75 / 120 / 92 / 28 / 10.64 / 17.36 / 25.93
6 / 8.75 / 120 / 47 / 73 / 27.74 / 45.26 / 53.83
7 / 8.75 / 120 / 50 / 70 / 26.80 / 43.40 / 51.97
8 / 8.75 / 120 / 60 / 60 / 22.80 / 37.20 / 45.77
9 / 8.75 / 120 / 51 / 69 / 26.22 / 42.78 / 51.35
10 / 120 / 40 / 80 / 30.40 / 49.60 / 58.17
11 / 120 / 40 / 80 / 30.40 / 49.60 / 49.60
12 / 120 / 40 / 80 / 30.40 / 49.60 / 49.60
13 / 50 / 120 / 40 / 80 / 30.40 / 49.60 / 49.60
*Numbers in ( ) represent negative values
**Land cost = 10
+ Plant started up at end of year 3
++ Working capital = 20

Q2:

Styrene production through ethylbenzene decomposition is described in Figure Q2, and the results shown in Table Q2 were obtained from analysis of this plant using CAPCOST software. Answer the following questions.

a.  Estimate the cost of operating labor (COL). Note that 10 reactors are used in the plant. Assume annual cost of one operator = $52900. [15 Marks]

b.  If mass flow rate and cost of ethylbenzene are 19417 kg/hr and 1.069 $/kg respectively, estimate the yearly cost of ethyl benzene? [15 Marks]

c.  If cost of waste treatment is 0, estimate the cost of manufacturing COMd. [20 Marks]

Useful data

Table Q2

Figure Q2

------End of Questions ------

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