Page 348 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

24.

a. The company can always leave the capital investment in the stock portfolio, which is projected to
yield 8% p.a. over the next seven years. What should the company do?

b. What is the break-even rate of return between the process improvement and doing nothing?

c. If the capital investment could be changed without changing the incremental revenues, what

capital investment changes this investment from being profitable (not profitable) to being not
profitable (profitable)?

During the design of a new process to manufacture nanocomposites, several alternative waste
treatment processes are being considered. The base case is the main waste treatment process, and the
options are modifications to the base case. Not all options are compatible with each other, and the
economic data on the only possible combinations are as follows.

25.

The nondiscounted, internal hurdle rate for investment is 14% p.a., after tax. Which waste treatment
process do you recommend?

The installation of a new heat exchanger is proposed for the batch crystallization step in an existing
pharmaceutical manufacturing process. The heat exchanger costs $49,600 (installed) and saves
$8000/yr in operating costs. Is this a good investment based on a before-tax analysis?

26. Data:
Internal hurdle rate = 12% p.a. (after tax)
Taxation rate = 40%
5-year MACRS depreciation used
Service life of heat exchanger = 12 yrs.

A process for the fabrication of microelectronic components has been designed. The required before-