Page 351 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

In an already operational pharmaceutical plant, you are considering three alternative solvent-
recovery systems to replace an existing combustion process. The internal hurdle rate is 15% after
taxes over eight years. Which alternative do you recommend?

36.

A condenser using refrigerated water is being considered for the recovery of a solvent used in a
pharmaceutical coating operation. The amount of solvent recovered from the gas stream is a function
of the temperature to which it is cooled. Three cases, each using a different exchanger and a different
amount of refrigerated water, are to be considered. Data for the process cases are given in the table.

37.

a. If the nondiscounted hurdle rate for projects is set at 15% p.a., which case do you recommend?

b. If the discounted hurdle rate is set at 5% p.a. and the project life is set at seven years, which case
do you recommend?

c. How does your result from Part (b) change if the project life were changed to 15 years?

d. How does your result from Part (b) change if the project life were changed to 5 years?

For Problem 10.8, uncertainties associated with predicting the revenues and cost of manufacturing
are estimated to be as follows.

Revenue: Expected range of variation from base case, low = $45 million, high = $53.5 million
38.
COM : Expected range of variation from base case, low = $16 million, high = $21.5 million
d

Using the above information, evaluate the expected distribution of NPVs and DCFRORs for the
project. Would this analysis change your decision compared to that for the base case?

Calculate the lowest and highest NPVs that are possible for Problem 10.38. Compare these values
39. with the distribution of NPVs from Problem 10.38. What are the probabilities of getting an NPV
within $5 million of these values?

Perform a Monte-Carlo analysis on Problem 10.10, using the following ranges for uncertain variables