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    The document contains 6 questions related to plant design and economics. Question 2 asks to calculate annual return percentages before and after taxes for a proposed manufacturing plant with a fixed capital investment of $900,000, working capital of $100,000, annual income of $800,000, annual expenses of $520,000, and a required minimum annual return of 15% before taxes. Question 4 asks to analyze economic data for an existing reactor and potential new reactor to determine if replacing the reactor meets the company's expected minimum annual return of 15% on additional investment. Question 5 asks to determine return on investment after taxes and payback period for a chemical plant with a total capital investment of $100 million, working capital of $10 million

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    Work Sheeet

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    353 views2 pages
    The document contains 6 questions related to plant design and economics. Question 2 asks to calculate annual return percentages before and after taxes for a proposed manufacturing plant with a fixed capital investment of $900,000, working capital of $100,000, annual income of $800,000, annual expenses of $520,000, and a required minimum annual return of 15% before taxes. Question 4 asks to analyze economic data for an existing reactor and potential new reactor to determine if replacing the reactor meets the company's expected minimum annual return of 15% on additional investment. Question 5 asks to determine return on investment after taxes and payback period for a chemical plant with a total capital investment of $100 million, working capital of $10 million

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    The document contains 6 questions related to plant design and economics. Question 2 asks to calculate annual return percentages before and after taxes for a proposed manufacturing plant with a fixed capital investment of $900,000, working capital of $100,000, annual income of $800,000, annual expenses of $520,000, and a required minimum annual return of 15% before taxes. Question 4 asks to analyze economic data for an existing reactor and potential new reactor to determine if replacing the reactor meets the company's expected minimum annual return of 15% on additional investment. Question 5 asks to determine return on investment after taxes and payback period for a chemical plant with a total capital investment of $100 million, working capital of $10 million

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    353 views2 pages

    Work Sheeet

    Uploaded by

    Awoke
    The document contains 6 questions related to plant design and economics. Question 2 asks to calculate annual return percentages before and after taxes for a proposed manufacturing plant with a fixed capital investment of $900,000, working capital of $100,000, annual income of $800,000, annual expenses of $520,000, and a required minimum annual return of 15% before taxes. Question 4 asks to analyze economic data for an existing reactor and potential new reactor to determine if replacing the reactor meets the company's expected minimum annual return of 15% on additional investment. Question 5 asks to determine return on investment after taxes and payback period for a chemical plant with a total capital investment of $100 million, working capital of $10 million

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    Addis Ababa Science & Technology University

    Department of Chemical Engineering


    Assignment and worksheet on Plant Design and Economics (ChEg5193)

    1. Suppose that two equally sound investments can be made. One of these requires
    $100,000 of capital and will yield a profit of $lO,OOO/year, and the second requires
    $1 million of capital and will yield $25,0OO/year. Compare the yearly profit and the
    annual rate of return on both investments?
    2. A proposed manufacturing plant requires an initial fixed-capital investment of
    $900,000 and $100,000 of working capital. It is estimated that the annual income will
    be $800,000 and the annual expenses including depreciation will be $520,000 before
    income taxes. A minimum annual return of 15 percent before income taxes is required
    before the investment will be worthwhile. Income taxes amount to 34 percent of all
    pre-tax profits. Determine the following:
    (a) The annual percent return on the total initial investment before income taxes.
    (b) The annual percent return on the total initial investment after income taxes.
    (c) The annual percent return on the total initial investment before income taxes based on
    capital recovery with minimum profit.
    (d) The annual percent return on the average investment before income taxes assuming
    straight-line depreciation and zero salvage value
    3. For the nominal annual interest rate of 8%,find the value of $10,000 deposit after 6 years
    with continuous compounding, daily compounding and quarterly compounding?

    4. A company is considering replacement of an existing reactor with new one the data is as
    follows:

    (1).Original installed cost of existing reactor:$1,500,000 (2).Annual Operating cost: $250,000


    (3). Time in service:5 years (4). Estimated remaining life time:3 years (5).Resale value at
    current condition:$5,000 (6) Installed cost of new reactor:$2,200,000 (7).Annual operating
    cost:200,000 (8)Estimated life time:10 years (9).Salvage Value: $250,000 All other costs
    (labor, maintenance, insurance etc.) for the two reactor is same. depreciation can be
    calculated using SLM Company expects a minimum annual return of 15% on additional
    investment for reactor replacement. With analysis of economic data for two reactors,
    determine whether the reactor replacement meets company’s expectation?

    5. After conceptual design and estimates of chemical plant, the following expenditure and
    revenues are estimated after the plant has achieved desired production rate.

    Total capital investment:$ 100,000,000, Working capital:$ 10,000,000 ,Annual sales:$


    80,000,000 and Annual expenditure (total production cost):$ 20,000,000

    Assume straight line depreciation over 10 years project life and tax rate of 35%,determine

    A. The return on investment after taxes

    B. The payback period

    6.

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