Coker A.K. Fortran Programs for Chemical Process Design, Analysis, and Simulation

Подождите немного. Документ загружается.

Engineering Economics 747

published in magazines such as the Chemical Engineering Plant cost

index, Engineering News-Records construction index, the Oil & Gas

Journal, and Process Engineering. Table 9-8 shows the international

plant cost indexes from March 1992 to February 1993.

Factored Cost Estimate

The purchased cost of an item of equipment, free on board (FOB) is

quoted by a supplier, and may be multiplied by a factor of 1.1 to give

the approximate delivered cost. The factorial methods for estimating

the total installed cost of a process plant are based on a combination of

materials, labor, and overhead cost components. The fixed capital cost,

Ccv, of a plant based on design can be estimated using the Lang Factor

method [14] given by the equation

Cvc - fL ~ CEQ (9-33)

where fc = 3.10 for solids processing

fc = 3.63 for mixed solids-fluid processing

fL = 4.74 for fluid processing

~CEQ is the sum of the delivered costs of all the major items of pro-

cess equipment. The major advantage of the Lang method is that the

cost of equipment is available.

Other methods for estimating capital investment consider the fixed-

capital investment required as a separate unit. These are known as the

functional-unit estimates, the process step scoring method, and the modu-

lar estimate.

The functional unit may be characterized as a unit operation, unit

process, or separation method that involves energy transfer, moving parts,

or a high level of internals. The unit includes all process streams

together with side or recycle streams. Bridgwater [ 16] proposed seven

functional units, namely, compressor, reactor, absorber, solvent extrac-

tor, solvent recovery column, main distillation column, and furnace and

waste heat boiler. Taylor [ 17] developed the step counting method, based

on a system in which a complexity score accounting for factors such as

throughput, corrosion problems, and reaction time is estimated for each

process step. The modular estimate considers individual modules in the

total system with each module consisting of a group of similar items.

For the modular estimate, all heat exchangers are classified in one

module, all furnaces in another, all vertical process vessels in another,

O "~

0~0 O~ O0 O~

~ ' I lllO

O~ ~!~ ~~

~ ~0!~ 0~~0~

~0~ 0~0~ ~000~0~

~ .

=.9.=

°~

0o0

.o~ = g

I".. (Z) O~ I.'3, 'rl ,~

CO;O ~:) CO (~0 LO

0 ,-I 000 ,--I

,r-'l;r'-I i-I r'-I ~ ,'-I

O ~-'-~ O

o: °

o og~

• -Ii,.--i ,-I ,-I ,--4 ,--4

04 04 o'~io3

~-I 0'~

~M ,~-4 r-I ,"1 ,M ~-'1

~t ,M ~-t ~"-I r-I rl

O~ tN O "O ~ O

,-,,1 r"l ,-4 ~1 ,r"; ,--I

gi ® gig o ~

•

• 0 •

8~ ~=,~

~o'~

SddMi~®o=

~000~00~

gddd4dg~

0000~00~

~0~0

O000:~O0~

q-i

e.-i

,,,,i

,-4

O1.

r.=.]

r.9

r.J

748

Engineering Economics 749

etc. The total cost estimate is considered under six general groupings.

These are chemical processing, solids handling, site development,

industrial buildings, offsite facilities, and project indirects [18].

Nomenclature

ARR = average rate of return

C = cash flow for each year

CcF = net annual cash flow

CFc = fixed capital cost

C K = capitalized cost

C L = land cost

C o = initial investment cost

C n = cash flow

Cvc = total capital cost

Cwc = working capital cost

C~ = capital cost of the designed plant

C 2 = capital cost of the existing plant

D = annual depreciation

DCFRR = discounted cash flow rate of return

Dj = annual depreciation charge

dj = depreciation rate

EMIP = equivalent maximum investment period

fd = discount factor

fK = capitalized cost factor

I = investment cost

IRP = interest recovery period

IRR = internal rate of return

i = interest rate of return (ROI/100)

m = exponential power for cost capacity relationships

NPV = net present value

NRR = net return rate

n = years of project life

PBP = payback period

PV = present value

PVR = present value ratio

PWR = present worth ratio

Q~ = capacity of the designed plant

Q2 =

capacity of existing plant

ROI = return of investment

S = salvage value

750

Fortran Programs for Chemical Process Design

PROBLEMS AND SOLUTIONS

Problem 9-1

Consider a plant costing $1,000,000 to build that produces a product

A. For the same capital outlay a different plant can be erected to pro-

duce an alternative product B. Conditions are such that each plant will

only be in operation for eight years and then both will be scrapped. The

cash flows in each of the eight years obtained by selling A and B are

shown in Table 9-9. A choice is being made about which plant is

more profitable.

Solution

The computer program PROG91 calculates the net present value and

the net return rate at discount rates of 5, 10, 15, 20, 25, 30, 35, and 40%.

Tables 9-10 and 9-11 give both the input data and computer outputs for

products A and B. Figure 9-5 shows a plot of the cumulative cash flows

against the project life, and Figure 9-6 gives a plot of the NPV against

the discount rate. Figure 9-5 gives the payback period of product A

between 3 and 4 years and product B is about 2 years. The results show

Table 9-9

Annual Cash Flows and Cumulative Cash Flows

Year

Product A Product B

Product A Cumulative Product B Cumulative

Cash Flows Cash Flows Cash Flows Cash Flows

$ $ $ $

-1,000,000 -1,000,000 -1,000,000 -1,000,000

1 100,000 -900,000 800,000 -200,000

2 200,000 -700,000 700,000 500,000

3 300,000 -400,000 600,000 1,100,000

4 400,000 0 500,000 1,600,000

5 500,000 500,000 400,000 2,000,000

6 600,000 1,100,000 300,000 2,300,000

7 700,000 1,800,000 200,000 2,500,000

8 800,000 2,600,000 100,000 2,600,000

Engineering Economics

Table 9-10

Input Data and Computer Output for the Net Present

Value of Product A at 10 Percent Discount Rate

751

DATA91.DAT

-i000000

i00000

2OOOOO

300000

400000

500000

600000

70OOOO

800000

NET PRESENT VALUE CALCULATION

******************************************************************************

9 YEARLY CASH FLOWS INCLUDING YEAR 0

i0.00 PERCENTAGE ANNUAL DISCOUNT RATE

YEAR CASH FLOWS ( $ ) CUMULATIVE DISCOUNT PRESENT

CASH FLOWS ( $ ) FACTOR VALUE ( $ )

0 -i000000.00 -i000000.00 1.0000 -I000000.00

1 i00000.00 -900000.00 .9091 90909.09

2 200000.00 -700000.00 .8264 165289.25

3 300000.00 -400000.00 .7513 225394.43

4 400000.00 .00 .6830 273205.36

5 500000.00 500000.00 .6209 310460.63

6 600000.00 ii00000.00 .5645 338684.31

7 700000.00 1800000.00 .5132 359210.63

8 800000.00 2600000.00 .4665 373205.84

THE NET PRESENT VALUE ( $ ) :

PRESENT VALUE RATIO:

THE NET RETURN RATE:

THE AVERAGE RATE OF RETURN:

THE PAYBACK PERIOD IS BETWEEN:

1136359.53

2.136

14.20 %

45.00 %

3 AND

4 YEARS

that product B gives greater present value ratios than product A. In

addition, product B gives greater net present values at different dis-

count rates than product A. These show that product B is more promis-

ing than product A. Further profitability indexes (ARR, NRR, PBP)

suggest that product B is a better choice than product A.

Problem 9-2

Using the cash flows of products A and B in Problem 9-1, determine

the discount cash flow rate of return (DCFRR).

752

Fortran Programs for Chemical Process Design

Table 9-11

Input Data and Computer Output for the Net Present

Value of Product B at 10 Percent Discount Rate

DATA91.DAT

-i000000

800000

700000

600000

500000

400000

300000

200000

I00000

NET PRESENT VALUE CALCULATION

9 YEARLY CASH FLOWS INCLUDING YEAR 0

I0.00 PERCENTAGE ANNUAL DISCOUNT RATE

YEAR CASH FLOWS ($) C~TIVE DISCOUNT PRESENT

CASH FLOWS ( $ ) FACTOR VALUE ( $ )

0 -i000000.00 -i000000.00 1.0000 -i000000.00

1 800000.00 -200000.00 .9091 727272.71

2 700000.00 500000.00 .8264 578512.37

3 600000.00 ii00000.00 .7513 450788.85

4 500000.00 1600000.00 .6830 341506.70

5 400000.00 2000000.00 .6209 248368.50

6 300000.00 2300000.00 .5645 169342.16

7 200000.00 2500000.00 .5132 102631.61

8 i00000.00 2600000.00 .4665 46650.73

THE NET PRESENT VALUE ($):

PRESENT VALUE RATIO:

THE NET RETURN RATE:

THE AVERAGE RATE OF RETURN:

THE PAYBACK PERIOD IS BETWEEN:

1665073.63

2.665

20.81 %

45.00 %

1 AND

2 YEARS

Solution

The computer program PROG92 determines the discounted cash flow

rate of return (DCFRR). Tables 9-12 and 9-13 illustrate both the input

data and computer outputs for products A and B. The DCFRR of

product A is 28.264%, and that of product B is 64.863%. The results

further confirm that product B is more promising than product A.

Problem 9-3

Calculate the yearly return of investment on the following financ-

ing data as shown in Table 9-14.

Figure 9-6. Net present value vs. discount rate.

753

754

Fortran Programs for Chemical Process Design

Table 9-12

Input Data and Computer Output for the Discount

Cash Flow Rate of Return (DCFRR) of Product A

DATA92.DAT

-i000000

I00000

200000

300000

400000

500000

600000

700000

80O0O0

DISCOUNT CASH FLOW RATE OF RETURN

CALCULATION

****************************************************************************

9 YEARLY CASH FLOWS INCLUDING YEAR 0

YEAR CASH FLOW ( $ )

****************************************************************************

0 -i000000.00

1 i00000.00

2 200000.00

3 300000.00

400000.00

5 500000.00

6 60000~.00

7 700000.00

8 800OOO.0O

THE DISCOUNT CASH FLOW RATE

OF RETURN

(%): 28.264

Solution

The computer program PROG93 computes the following: the yearly

cash flows, the cumulative cash flows, the present value, the net present

value, present value ratio, average return rate, net return rate, and the

payback period. Table 9-15 gives the input data and computer output

for the cash flows during 10 years of the project life, and at a discount

rate of 5 percent. The computed salvage value of the investment is

$4,294,967. The cash flows generated by the computer program PROG93

is then used to determine the DCFRR from program PROG92. Table 9-16

lists the input data and computer output for DCFRR of the investment

as 6.347 percent.

(text continued on page 761)

Table 9-13

Input Data and Computer Output for the Discount

Cash Flow Rate of Return (DCFRR) of Product B

DATA92.DAT

-i000000

800000

700000

600000

500000

400000

300000

200000

i00000

DISCOUNT CASH FLOW RATE OF RETURN CALCULATION

9 YEARLY CASH FLOWS INCLUDING YEAR 0

YEAR CASH FLOW ($)

0 -i000000.00

1 800000.00

2 700000.00

3 600000.00

4 500000.00

5 400000.00

6 300000.00

7 200000.00

8 i00000.00

THE DISCOUNT CASH FLOW RATE OF RETURN (%):

Table 9-14

Financing Data

64.863

1. Annual revenue, $ 9,000,000

2. Annual operating cost $ 1,200,000

3. Depreciating base, $ 40,000,000

4. Project life, years 10

5. Initial loan, $ 30,000,000

6. Number of payment per year 12

7. Annual interest, % 10

8. Investment credit, % 10

9. Tax rate, % 50

10. Rate of return, % 5

755

Table 9-15

Input Data and Computer Output for the Economic

Project Evaluation at 5 Percent Discount Rate

DATA93.DAT

9000000

1200000

40000000

30000000

ECONOMIC EVALUATION OF A PROJECT

****************************************************************************

1 ANNUAL REVENUE $:

2 ANNUAL OPERATING COST $:

3 DEPRECIATION BASE $:

4 PROJECT LIFE, YEARS:

5 INITIAL LOAN $:

6 NUMBER OF PAYMENTS PER YEAR:

7 ANNUAL INTEREST, %:

8 INVESTMENT CREDIT, %:

9 TAX RATE, %:

i0 DISCOUNT RATE %:

10.

12.

I0.

i0.

50.

9000000.00

1200000.00

40000000.00

30000000.00

5.00

YEAR

****************************************************************************

REVENUE $: 9000000.00

OPERATING COST $: 1200000.00

DEPRECIATION $: 8000000.00

INTEREST $: 2917171.30

PRE-TAX INCOME $: -3117171.30

TAX AT 50.%, $: .00

AFTER TAX INCOME $: -3117171.30

CASH FLOW $: 4882828.70

756