Final Flashcards
What is FCI
Fixed Capital Investment
What is TCI
Total Capital Investment
What is Direct Production Cost part of?
Product Cost (C)
Do you get back the money associated to depreciation?
No
Can your cumulative cash position be negative?
Yes
The cost of installing a pump (not purchasing it) is
Part of Direct Investment Cost
The Marshall and Swift index is used to adjust
Capital Cost by time
A pump has a cost of $14,000 and a scrap value of $2,000. What is the total depreciation?
$14,000 - $2,000 = $12,000
Cost - scrap value = depreciation
A plant cost is $3,000,000 in 2007. What is the cost in 2018 if the M&S indices are 1452.3 in 2007 and 1955.8 in 2018?
$3,000,000(1955.8/1452.3)=$4,040,074
A plant has a cost of $300,000 for a capacity of 100 ton/day. What is the cost of the plant for a capacity of 230 ton/day if the power is x=0.6?
$300,000(230/100)^.6 = $494,490
What is depreciation?
Loss of equipment value
What is straight line depreciation?
Equal depreciation each year
Depreciation does not last for as long as the plant does what?
Operates
Depreciation does/does not last forever?
Does not
(T/F) Depreciation lasts only one or two year?
False
(T/F) Depreciation is mandatory?
False
MACRS depreciation is what?
Double decline followed by straight line depreciation
When the cost exponent of capacity is less than 1, two equipment of equal size will cost what?
More than one of twice the size
What is money spent today to take raw material and covert it to a unit of product called?
Product cost
A pump has a cost of $14,000 and a scrap value of $2000. What is the depreciation using straight line method over 10 years?
($14,000-$2,000)/10 = $1,200
A pump has a cost of $14,000 and a scrap value of $2,000. What is the first year depreciation using double decline method calculated for a total of 10 years?
$12,000(1-(2/10))^1 = $9,600
$12,000 - $9,600 = $2,400
What is return of investment?
Net annual profit divided by TCI
What is the value today of future money?
Present worth
What is POT?
Pay Out Time