Economic Analysis

Question 1

What are capital costs?

Answer 1

1 time expenses incurred to build or set up the facility
(ex. fixed costs, equipment costs, and cost indexes)

Question 2

What are operating costs?

Answer 2

reoccurring expenses for running the process

Question 3

How is the economic analysis of a process carried out?

Answer 3

1. Process materials and energy balances determined
2. Equipment identified
3. Costs are estimated
   Costs include capital costs, manufacturing or operating costs, net present value, rate of return, payback period

Question 4

How are capital costs and operating costs determined?

Answer 4

Using the Chemical Engineering Plant Cost Index (CEPCI)

Question 5

What are the considerations when carrying out an economic analysis?

Answer 5

We need to multiply the total plants cost by CEPCI to get todays costs