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Production and Capital Cost Estimation 69

Calculation Procedures Using the Individual Factor Method

Table 2.15 contains equations for calculating the depreciable capital cost using the
individual factor method. The equations are similar to the average factor method.
Table 2.16 outlines the calculation procedure. Table 2.8 contains direct-cost fac-
tors for several pieces-of-equipment, which depends on the material-of-
construction. For indirect costs Guthrie [13] uses 1.34 for fluid processes and 1.29
for solids processes. He also uses 15% and 3% of the installation factor for contin-
gency and the contractor's fee. Again, because process operating conditions and
materials of construction do not affect the cost of buildings and auxiliary facilities,
we use the base installed costs to calculate these costs. For quick estimates Guthrie
[36], uses 2 to 6% of the installed costs for buildings and 17 to 25% for auxiliary
facilities. Use averages of 4% and 21% respectively for both costs. A calculation
procedure for the depreciable capital costs is outlined in Table 2.16.

Table 2.15 Summary of Equations for Depreciable Capital Cost -
Individual Factor Method (Based on Purchased Equipment Cost (FOB))

The subscript i refers to a major piece-of-equipment.

roaV

CpB2i = CpBii I ——— I (2.15.1)

CPB i - CpB2i — (2.15.2)
Iii

CpAi = frifpifMifDiCpBi — for some equipment (2.15.3)
f
CPA i = fr i (fp i + fo 0 M i Cp B ; — for heat exchangers
fii = fuci fici foi — foci from Table 2.8 (2.15.4)
i = 1 .34 for a fluid process or 1 .29 for a solids process
f ic
foi = 1.18

I i
C AI = f I i C P A i (2.15.5)
Z
C Bi = ifnCp B i (2.15.6)
CD = CA, + fAB CBI (2.15.7)

fAB = auxiliary-facilities factor + buildings factor = 0.04 + 0.21 = 0.25 (2.15.8)
f^B = 0 for a plant addition

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