evan406's version from 2015-12-09 04:06

chapter 7

Question Answer
What is included in FCI? (list 4)1. Cost of equipment
2. Cost of land
3. Construction overhead
4. Labor to install equipment and material
What is included in WCI (working capital investment)? (list 2)1. money required to start up plant
2. float money, will be recovered
What is required to start up a plant? (list 3)1. Salaries
2. raw materials
3. contingencies
What does bare module include in addition to the cost of equipment? (list 2)1. direct project expenses
2. indirect project expenses
How is CoE determined?1. Equipment costs at operating conditions
What is meant by base conditions? (list 2)1. Carbon steel
2. 1 atm
What is included in TM? (list 3)1. bare module cost
2. contingency and fees
3. auxiliary facilities
What is TM?1. Cost of making small to moderate expansions or alterations to an existing facility
2. All major equipment costs at operating conditions
Lang Factor Method - What is LFM? Whats not included in it?1. Cost to build a major expansion to an existing chemical plant
2. Cannot account for common problems of special materials and high operating pressures

chapter 8

Question Answer
What are Direct Manufacturing Costs?Costs that vary with production rate
What are Fixed Manufacturing Costs?Independent of changes in production
What are General Expenses?Overhead costs to run business
What is included in Direct Manufacturing Costs? (list 3)1. Raw material
2. operating labor
3. maintenance
What is included in Fixed Manufacturing Costs?1. property taxes
2. insurance
3. depreciation
What is included in General Expenses?1. management
2. sales
3. financing
4. research
Cost of Manufacturing - What is included?1. Direct Manufacturing Costs
2. fixed manufacturing costs
3. general expenses
Cost of operating labor - What is included and not included?INCLUDED
1. Number of processing steps involving the handling of particulate matter, number of processing steps not involving particulates
2. Time each operator works during year
3. cost of labor

1. support or supervision staff
2. vessels and pumps
Utilities - What is included?1. Cooling water
2. steam
3. air
4. fuels
5. electrical
Waste Treatment - What is included?Treatment of water and toxic/greenhouse gasses
What is stream factor?(Number of days plant operates per year)/365

chapter 9

Question Answer
What is simple interest?Interest paid solely on the initial investment
What is compound interest?Earned interest is reinvested
What is Effective Annual Interest Rate?1. Allows interest calculations to be made on an annual basis
2. Interest rates will increase as the number of compounding periods increases
3. Takes into account compounding during the year, for the year
4. Shows actual return from interest
What is the maximum Federal Income Tax Rate for Corporations with Corporate Annual Income over $18,400,000?35%
Fixed Capital Investment - Can it be depreciated?it can be depreciated except for the land portion of it
Working Capital - Can it be depreciated? Why?no, it's fully recoverable
Straight Line Depreciation - What is it?1. Equal amount of depreciation is charged each year over the depreciation period
2. You have a salvage value
MACRS - What is it?1. Period over which the depreciable portion of the investment may be discounted
2. established by IRS
How many years of depreciation for a 5 year recovery MACRS depreciation schedule?6
Who determines the recovery periods?IRS
How are recovery periods used?determine the depreciation rates

chapter 10

Question Answer
ROROI - What does it mean?Non-discounted rate at which money is made from a fixed capital investment
What does ROROI measure?Average annual net profit/ fixed capital investment
What is NPV?1. Discounted cumulative cash position at end of project
2. Determines whether project is profitable
What is DCFROR stand for?Discounted cash flow rate of return
What is DCFROR?1. Interest rate at which all the cash flows must be discounted in order for the NPV of the project equal to zero.
2. Highest after-tax interest or discount rate at which the project can break even

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