Page 344 - Analysis, Synthesis and Design of Chemical Processes, Third Edition
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c. What method of depreciation was used?
d. What was the cost of manufacturing, not including depreciation?
Consider the following two new chemical plants, each with an initial fixed capital investment (year
6
0) of $15 × 10 . Their cash flows are as follows.
14.
a. Calculate the NPV of both plants for interest rates of 6% and 18%. Which plant do you
recommend? Explain your results.
b. Calculate the DCFROR for each plant. Which plant do you recommend?
c. Calculate the nondiscounted payback period (PBP) for each plant. Which plant do you
recommend?
d. Explain any differences in your answers to Parts (a), (b), and (c).
In a design, you have the choice of purchasing either of the following batch reactors.
15.
If the internal rate of return for such comparisons is 9% p.a., which of the alternatives is least costly?
Two pieces of equipment are being considered for an identical service. The installed costs and
yearly operating costs associated with each piece of equipment are as follows.
16.
a. If the internal hurdle rate for comparison of alternatives is set at 15% p.a., which piece of
