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103
Section 9
Cost Summaries
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9.1 Fixed Capital Summary
Table 9.1: Fixed Capital Investment Summary
Bare Module Costs Process Machinery
41,454,717 Spares
3,629,192 Storage
831,406 Other Equipment
699,530 Catalysts
5,576,741 Computers, Software, Etc.
- Total Bare Module Costs:
52,191,590 Plus: Cost of Site Preparations
2,609,579 Plus: Cost of Service Facilities
2,609,579 Plus: Allocated Costs for utility plants and related facilities
- Direct Permanent Investment
57,410,744 Plus: Cost of Contingencies Contractor Fees
10,333,934 Total Depreciable Capital
67,744,678 Plus: Cost of Land
1,354,894 Plus: Cost of Royalties
- Plus: Cost of Plant Start-Up
6,774,468 Total Unadjusted Permanent Investment
75,874,040 Site Factor
1.0
Total Permanent Investment 75,874,040
Purchase costs and bare module costs of equipment were estimated using Aspen IPE and Aspen Economic Analyzer. Once total bare module costs were estimated, cost of site preparation
and service facilities were estimated as 5 of total bare module costs using the method described in Seider, Seader, Lewin, and Widago. It was assumed that there were already existing utility and
wastewater treatment plants available so the allocated costs for utility plants and related facilities was assumed to be zero. Also following the procedure outline in Seider et al, the cost of
contingencies and contractor fees was estimated to be 18 of direct permanent investment, the cost of land is 2 of total depreciable capital, and plant start-up cost is estimated to be 10 of
total depreciable capital.
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Table 9.2: Total Capital Investment Summary
Total Permanent Investment: 75,874,040
Plus: Present Value of 2014 Working Capital 13,228,811
Plus: Present Value of 2015 Working Capital 5,751,657
Plus: Present Value of 2016 Working Capital 5,001,441
Total Capital Investment 99,855,948
The total capital investment, depicted in Table 9.2, includes total permanent investment and the net present value of working capital contributions. The working capital forms a
significant part of the total capital investment of approximately 24.
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9.2 Variable Cost Summary
Table 9.3: Variable Cost Summary
General Expenses Selling Transfer Expenses:
10,500,000 Direct Research:
16,800,000 Allocated Research:
1,750,000 Administrative Expense:
7,000,000 Management Incentive Compensation:
4,375,000 Total General Expenses
40,425,000 Raw Materials
Propane 42,600,000
Compressed Oxygen 6,000,000
Total Raw Materials 48,600,000
Byproducts Wastewater Treatment
7,564,660 Total Byproducts
7,564,660 Utilities
High Pressure Steam 2,440,000
Low Pressure Steam 1,658,945
Cooling Water 25,000
Electricity 13,800,000
Total Utilities 17,136,845
Total Variable Cost 113,726,505
General expenses cover expenses associated with the direct management of product within the plant but are not related to the direct manufacturing cost. Instead, they are assumed to
be a fixed percentage of sales.
21
21
Seider, W. D., Seader, J. D., Lewin, D. R., Widagdo, S. 2009. Product and Process Design Principles: Synthesis, Analysis, and Evaluation Vol. 3. Hoboken, NJ: John Wiley Sons, Inc.
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9.3 Fixed Cost Summary
Fixed costs for the process were estimated according to the methods described in Seider, Seader, Lewin, and Widago. Operations expense was estimated by assuming 6 operators per shift
with 5 shifts, an hourly wage of 40operator hour, and including 30 of direct wages and benefits. Maintenance expense was estimated by including 4.5 of depreciable capital for wages
Table 9.4: Fixed Cost Summary
Operations Direct Wages and Benefits
2,496,000 Direct Salaries and Benefits
748,800 Operating Supplies and Services
149,760 Technical Assistance to Manufacturing
4,500,000 Control Laboratory
4,500,000 Total Operations
12,394,560 Maintenance
Wages and Benefits 3,026,807
Salaries and Benefits 756,702
Materials and Services 3,026,807
Maintenance Overhead 151,340
Total Maintenance 6,961,656
Operating Overhead General Plant Overhead
527,123 Mechanical Department Services
210,849 Employee Relations Department
421,699 Business Services
520,095 Total Operating Overhead
1,679,766 Property Taxes and Insurance
Property Taxes and Insurance 2,017,871
Other Annual Expenses Rental Fees:
- Licensing Fees:
-
Total Fixed Costs 23,053,854
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