03 Chemical Engineering Plant Design And Economics

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Code No: R05410803
Set No. 1
IV B.Tech I Semester Regular Examinations, November 2008
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
1. (a) Compare batch and continuous operation.
(b) Compare materials of construction with homogeneous metal or alloy with glass
lined equipment. [8+8]
2. Explain method for Power factor applied to plant capacity ratio for estimating
capital investment. [16]
3. Explain the components of xed charges. [16]
4. Explain the following:
(a) Future worth
(b) Nominal Interest rate
(c) What will be the total amount available 10 years from now if Rs. 2,00,000 is
deposited at the present time with nominal interest at the rate of 10 percent
compounded semiannually? [5+5+6]
5. (a) De ne:
i. Normal tax
ii. Surtax
iii. Capital gains tax
iv. Excess pro ts tax.
(b) What is the in uence of depreciation costs on income tax? Brie y explain.
(c) Write a brief note about tax returns. [8+4+4]
6. In order to make it worthwhile to purchase a new piece of equipment, the annual
depreciation costs for the equipment cannot exceed Rs. 3000 at any time. The
original cost of the equipment is Rs. 30,000, and it has zero salvage and scrap value.
Determine the length of service life necessary if the equipment is depreciated
(a) by the sum-of-the-years-digits method, and
(b) by the straight-line method.
[8+8]
7. (a) Discuss rate of return on initial investment.
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Code No: R05410803
Set No. 1
(b) A company has three alternative investments which are being considered. Be-
cause all three investments are of the same type of unit and yield the same
service, only one of the investments can be accepted. The risk factors are the
same for all three cases. Company policies, based on the current economic
situation dictate that a minimum annual return on the original investment
of 15% after taxes must be predicted for any unnecessary investment with
interest on investment not included as a cost. (This may be assumed to mean
that other equally sound investments yielding a 15% return after taxes are
available) Company policies also dictate that, where applicable, straight-line
depreciation is used and, for time value of money interpretations, end-of-year
cost and pro t analysis is used. Land value and pre-startup costs can be ig-
nored.
Given the following data, determine which investment, if any, should be made
by alternative-analysis pro tability-evaluation method of capitalized costs.
In-vest- Total initial Working Salvage value Service Annual cash Annual
ment xed capital at end of life, ow to cash
num -capital . investment, service years pro ject expenses
-ber - investment, Rs. life, after (constant
Rs. Rs. taxes, for
Rs. each
year),
Rs.
1 100,000 10,000 10,000 5 See yearly 44,000
tabulation*
2 170,000 10,000 15,000 7 52,000 28,000
(constant)
3 210,000 15,000 20,000 8 59,000 21,000
(constant)
*For investment number 1, variable annual cash ow to project is:
year 1 = Rs. 30,000, year 2 = Rs. 31,000, year 3 = Rs. 36,000, year 4 =
Rs.40,000, year 5 = Rs. 43,000. [4+12]
8. (a) What is optimum economic design? Illustrate the principles of an optimum
economic design by means of an example.
(b) The following equation shows the e ect of he variables x and y on the total
cost for a particular operation:
T = 2 33 + 11,900 xy + 1 86 + 10
Determine the values of and which will give the least total cost analytically.
[8+8]
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Code No: R05410803
Set No. 2
IV B.Tech I Semester Regular Examinations, November 2008
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
1. (a) Explain re and explosion hazards.
(b) Discuss preservation and control of Mechanical, Electrical and Chemical haz-
ards. [8+8]
2. What is turn over ration? How this turn over ration method is applied to estimate
the capital investment? [16]
3. Describe the total manufacturing costs. [16]
4. (a) What is uniform perio dic payment?
(b) A concern borrows Rs. 50,000 at an annual, e ective, compound-interest rate
of 10 percent. The concern wishes to pay o the debt in 5 years by making
equal payments at the end of each year. How much will each payment have
to be? [6+10]
5. (a) De ne:
i. Normal tax
ii. Surtax
iii. Capital gains tax
iv. Excess pro ts tax.
(b) Discuss in detail about the legal responsibilities of a concern with regard to
accident and emergencies. [8+8]
6. (a) Write about the following depreciation accounting methods:
i. single unit method
ii. composite account
iii. classi ed account
iv. vintage group account
(b) Discuss in detail about the sinking fund method. Compare with straight line
method. [8+8]
7. (a) Discuss rate of return on initial investment.
(b) A company has three alternative investments which are being considered. Be-
cause all three investments are of the same type of unit and yield the same
service, only one of the investments can be accepted. The risk factors are the
same for all three cases. Company policies, based on the current economic
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Code No: R05410803
Set No. 2
situation dictate that a minimum annual return on the original investment
of 15% after taxes must be predicted for any unnecessary investment with
interest on investment not included as a cost. (This may be assumed to mean
that other equally sound investments yielding a 15% return after taxes are
available) Company policies also dictate that, where applicable, straight-line
depreciation is used and, for time value of money interpretations, end-of-year
cost and pro t analysis is used. Land value and pre-startup costs can be ig-
nored.
Given the following data, determine which investment, if any, should be made
by alternative-analysis pro tability-evaluation method of capitalized costs.
In-vest- Total initial Working Salvage value Service Annual cash Annual
ment xed capital at end of life, ow to cash
num -capital . investment, service years pro ject expenses
-ber - investment, Rs. life, after (constant
Rs. Rs. taxes, for
Rs. each
year),
Rs.
1 100,000 10,000 10,000 5 See yearly 44,000
tabulation*
2 170,000 10,000 15,000 7 52,000 28,000
(constant)
3 210,000 15,000 20,000 8 59,000 21,000
(constant)
*For investment number 1, variable annual cash ow to project is:
year 1 = Rs. 30,000, year 2 = Rs. 31,000, year 3 = Rs. 36,000, year 4 =
Rs.40,000, year 5 = Rs. 43,000. [4+12]
8. (a) Discuss about the intangible and practical considerations in optimum design.
(b) The following equation shows the e ect of he variables x and y on the total
cost for a particular operation:
T = 2 33 + 11,900 xy + 1 86 + 10
Determine the values of and which will give the least total cost analytically.
[8+8]
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Code No: R05410803
Set No. 3
IV B.Tech I Semester Regular Examinations, November 2008
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
1. Explain Air Pollution and abatement techniques. [16]
2. Discuss the following methods for estimating capital investment:
(a) Percentage of delivered equipment cost
(b) Lang factors for approximation of capital investment. [8+8]
3. Explain the modular estimate and unit-operation estimate methods in estimating
xed capital investment. [16]
4. An annuity due is being used to accumulate money. Interest is compounded at an
e ective annual rate of 10 percent, and Rs. 1,00,000 is deposited at the beginning
of each year. What will be the total amount of the annuity due be after 5 years?
[16]
5. (a) Give the three di erent types of classi cation of taxes and discuss abut them
in detail.
(b) Write abut self insurance and discuss about the several ways of applying self
insurance. [10+6]
6. A materials testing machine was purchased for Rs. 20,000 and was to be used for
5 years with an expected residual salvage value of Rs. 5000. Determine the annual
depreciation charges and year-end book values obtained by using;
(a) Straight line depreciation
(b) Sum-of-the-digits depreciation
(c) Double declining-balance depreciation. [5+5+6]
7. An existing plant has been operating in such a way that a large amount of heat is
being lost in the waste gases. It has been proposed to save money by recovering
the heat that is now being lost. Four di erent heat exchangers have been designed
to recover the heat, and all prices, costs, and savings have been calculated for each
of the designs. The results of these calculations are presented in the following:
Design No.1 No.2 No.3 No.4
Total initial installed cost, Rs. 10,000 16,000 20,000 26,000
Operating costs, Rs./yr 100 100 100 100
Fixed charges, % of initial cost/yr 20 20 20 20
Value of heat saved, Rs./yr 4,100 6,000 6,900 8,850
The company in charge of the plant demands at least a 10% annual return based
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Code No: R05410803
Set No. 3
on the initial investment for any unnecessary investment. Only one of the four
designs can be accepted. Neglecting e ects due to income taxes and the time value
of money, which (if any) of the four designs should be recommended? [16]
8. (a) Describe the general procedure for optimizing two independent variables both
analytically and graphically.
(b) Discuss about the intangible and practical considerations in optimum design.
[8+8]
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Code No: R05410803
Set No. 4
IV B.Tech I Semester Regular Examinations, November 2008
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
1. What is a process layout. Explain with a neat diagram the layout of any chemical
industry that you have visited. [16]
2. Explain the following methods for estimating capital investment:
(a) Investment cost per unit of capacity
(b) Turn over ratios.
[8+8]
3. Describe the functional estimate and the average unit cost estimate methods in
estimating xed capital Investment. [16]
4. Heat exchanger ‘A’ costs Rs. 75,000 with an annual operation cost of Rs. 5,000.
A second exchanger ‘B’ costs Rs. 1, 00,000 with an annual operating cost of Rs.
3,000. Both have an estimated service life of 5 years. Exchanger ‘A’ has a salvage
value of Rs. 1,000 and exchanger ‘B’ has a salvage value of Rs. 1,500. Money is
worth 15 percent:
(a) What is the present worth of the service for 10 years provided by the two
alternates?
(b) What is the present capitalized cost for perpetual service? [8+8]
5. (a) Why are taxes levied? Discuss about property taxes, excise taxes and income
taxes.
(b) Discuss about self insurance in detail. [10+6]
6. (a) What is the present value of an asset? Distinguish between the various types
of present values.
(b) Discuss in detail about the declining balance metho d for determining depre-
ciation. Compare with the straight line method. [8+8]
7. (a) Discuss rate of return on initial investment.
(b) A company has three alternative investments which are being considered. Be-
cause all three investments are of the same type of unit and yield the same
service, only one of the investments can be accepted. The risk factors are the
same for all three cases. Company policies, based on the current economic
situation dictate that a minimum annual return on the original investment
of 15% after taxes must be predicted for any unnecessary investment with
interest on investment not included as a cost. (This may be assumed to mean
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Code No: R05410803
Set No. 4
that other equally sound investments yielding a 15% return after taxes are
available) Company policies also dictate that, where applicable, straight-line
depreciation is used and, for time value of money interpretations, end-of-year
cost and pro t analysis is used. Land value and pre-startup costs can be ig-
nored.
Given the following data, determine which investment, if any, should be made
by alternative-analysis pro tability-evaluation method of rate of return on
initial investment.
In-vest- Total initial Working Salvage value at Service Annual cash Annual
ment xed -capital capital end of life, ow cash
num-ber capital investment, service years to project expenses
investment, Rs . life, after taxes, (constant
Rs Rs. Rs. for each
year),
Rs.
1 100,000 10,000 10,000 5 See yearly 44,000
tabulation*
2 170,000 10,000 15,000 7 52,000 28,000
(constant)
3 210,000 15,000 20,000 8 59,000 21,000
(constant)
*For investment number 1, variable annual cash ow to project is: year 1 = Rs.
30,000, year 2 = Rs. 31,000, year 3 = Rs. 36,000, year 4 = Rs.40,000, year 5 = Rs.
43,000. [4+12]
8. Explain the general procedure for determining optimum conditions, both analytical
and graphical procedures, with one variable and with two or more variables. [16]
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