InstructionsWELCOME to Cost & Evaluation Workbookaccompanying Plant Design and Economics for Chemical Engineers, 5th edition,by Peters, Timmerhaus and West.These spreadsheets are made available for convenient implementation of methodspresented in the text. The sheets are color coded to assist the user. A hypotheticalexample, 'Illustration 101', is included. The basis for all costs is Jan. 2002.Steps to follow:1. Please download the workbook to your computer.2. The sheets are intended for use in the sequence presented. However, any sheetmay be by-passed so long as the information skipped is input manually where neededin subsequent sheets. Default values may be replaced by the user.3. Purchased Equipment Costs may be obtained from the file "Equipment Costs,"the graphs in the text, or otherwise, and entered manually into cell H12 on theCapital Inv.' spreadsheet.4. On the sheet 'Capital Inv.' enter the estimated current total purchased cost of theprocess equipment. For the proposed plant type, copy the corresponding "Fraction ofdelivered equipment" column entries into the tan "User" column. The sheet thencalculates and transfers results to appropriate subsequent sheets.5. On the sheet 'Materials & Labor' enter the product prices and flowrates, the rawmaterials prices and flow rates, and the labor requirements and current ENR labor index.6. On the sheet 'Utilities' the quantity of each utility needed annually must be enteredin appropriate units. The total annual utilities cost is transferred to sheet 'Annual TPC'.7. The 'Depreciation' sheet is used only if the user wishes to change the default(5-year MACRS) depreciation method. To make a change, copy the appropriate MACRSrow to the 'Annual depreciation" row of sheets 'Evaluation' and 'Year-0 $', or, enterconstant annual (straight line) value into depreciation row of those sheets.8. On the 'Annual TPC' sheet, all values are calculated from information available onother sheets. The user may change defaults or enter preferred values. The calculatedannual TPC is transferred to 'Evaluation'.9. The sheet 'Evaluation' uses values from other sheets to calculate the commonprofitability measures. The user may change defaults, or enter desired valuesinto the sheet. In particular, the user may change the default inflation rates inorder to study their effects on profitability.All calculations in 'Evaluation' are made in current (i.e. inflated) dollars. Inflationadjustments are made from the time of the estimates.To make evaluations for periods of less than 10 years, leave unneeded columns blank.For periods greater than 10 years, insert columns as needed and copy from an existingyear column into the new columns. Check equations for correct cell references.10. A second evaluation sheet, 'Year-0 $', also is included. It is the same assheet 'Evaluation', except that all the inflated $ values are converted to constant,year-0 dollars (as discussed in the text). This method is considered to reflect morerealistically the effect of inflation on the profitability measures. The user may changethe default inflation rates in order to study their impacts on profitability.

Capital Inv.ESTIMATION OF CAPITAL INVESTMENT BY PERCENTAGE OF DELIVERED EQUIPMENT METHOD(See Table 6-9)The fractions in the cells below are approximations applicable to typical chemical processingplants. These values may differ depending on many factors such as location, process type, etc.Required user inputDefaultSubtotalResultRequired, from a linked sheet or entered manuallyNotes & commentsProject Identifier: Illustration 101Fraction of delivered equipmentUser: copy from values at left or insertCalculated values, million $Solid- processing plantSolid-fluid processing plantFluid processing plantDirect CostsPurchased equipment, E'8.800Delivery, fraction of E'0.100.100.100.100.880Subtotal: delivered equipment9.680Purchased equipment installation0.450.390.470.474.550Instrumentation&Controls(installed)0.180.260.360.363.485Piping (installed)0.160.310.680.686.582Electrical systems (installed)0.100.100.110.111.065Buildings (including services)0.250.290.180.181.742Yard improvements0.150.120.100.100.968Service facilities (installed)0.400.550.700.706.776Total direct costs1.692.022.602.6034.848Indirect CostsEngineering and supervision0.330.320.330.333.194Construction expenses0.390.340.410.413.969Legal expenses0.040.040.040.040.387Contractor's fee0.170.190.220.222.130Contingency0.350.370.440.444.259Total indirect costs1.281.261.441.4413.939Fixed capital investment (FCI)48.787Sent to 'Evaluation' and 'Year-0 $', there adjusted as described belowWorking capital (WC)0.700.750.890.898.615Total capital investment (TCI)57.402The investments are made over a period of time. This is represented on the basis that startup(time 0) will be three years after the date of the estimate, that 15% of the fixed capital investmentis spent in the year beginning at the time of the estimate (year ending at time -2), 35% in thesecond year (ending at -1), and 50% in the third year (ending at time 0). These values may bechanged. The amounts are inflated at the beginning of each year after the estimate, by the defaultconstruction inflation rate. These changes are all made in the sheets 'Evaluation' and 'Year-0 $'.It is assumed that all working capital is spent at time 0.

Materials&LaborANNUAL RAW MATERIAL COSTS AND PRODUCTS VALUESANNUAL OPERATING LABOR COSTSProcess Identifier: Illustration 101Process Identifier: Illustration 101Required user inputNotes & commentsRequired user inputNotes & commentsDefault, may be changedDefault, may be changedRESULTRESULTProducts, Coproducts and ByproductsOperating LaborName of MaterialPrice, $/kgAnnual Amount, million kg/yAnnual value of product, million $/yNumber of operators per shift*Shifts per day**Operator rate, $/h #Annual operating labor cost, million $/yMain1.6030.00048.003333.670.885Sent to 'Annual TPC'Byproduct0.2512.0003.00*See Tables 6-13 and Fig. 6-9.0.00**Default = 3 for continuous process.0.00Enter appropriate value for batch operation.0.00#To obtain current, local value, enter (latest local0.00ENR skilled labor index)/6067 =1Total annual value of products =51.00Sent to 'Evaluation' and 'Year-0 $'Raw MaterialsName of MaterialPrice, $/kgAnnual Amount, million kg/yAnnual raw materials cost, million $/y10.4520.0009.0020.2512.0003.0030.0513.0000.650.000.000.00Total annual cost of raw materials =12.65Sent to sheet 'Annual TPC'

UtilitiesUTILITY COSTSSee Table 6-14 and Table B-1 for ranges of utility unit costs and sources of information. Defaultvalues are rough averages and may be changed. Utility costs can differ widely with location.Process Identifier: Illustration 101Required user inputNotes & commentsResultDefault, may be changedTOTAL UTILITY COST =2.025million $/ySent to sheet 'Annual TPC'UtilityDefault unit costDefault cost unitsAnnual utility requirement, in appropriate unitsDefault units of utility requirementAnnual utility cost, million $/yAir, compressedProcess air0.45$/100m3 #100 m3#/y0.000Instrument air0.90$/100m3 #100 m3#/y0.000ElectricityPurchased, U.S. average0.045$/kWh1800000kWh/y0.081Self-generated0.05$/kWhkWh/y0.000FuelCoal1.66$/GJGJ/y0.000Fuel oil3.30$/GJGJ/y0.000Natural gas3.00$/GJ360000GJ/y1.080Manufactured gas12.00$/GJGJ/y0.000Refrigeration, to temperature15 oC4.00$/GJGJ/y0.0005 C5.00$/GJGJ/y0.000-20 oC8.00$/GJGJ/y0.000-50 oC14.00$/GJGJ/y0.000Steam, saturated3550 kPa8.00$/1000 kg1000 kg/y0.000790 kPa6.00$/1000 kg400001000 kg/y0.240Exhaust (150 kPa)2.00$/1000 kg1000 kg/y0.000Waste waterDisposal0.53$/m3m3/yTreatment0.53$/m3400000m3/y0.212Waste disposalHazardous145.00$/1000 kg1000 kg/y0.000Non-hazardous36.00$/1000 kg1000 kg/y0.000WaterCooling0.08$/ m32500000m3/y0.200ProcessGeneral0.53$/m3400000m3/y0.212Distilled0.90$/m3m3/y0.000#measured at 101.3 kPa and 15C.

DepreciationDEPRECIATIONDefault = 5-y MACRS.Default is in place in sheets 'Evaluation' and 'Year-0 $'.To use a different recovery period, copy the entire row into the depreciation row ofsheets 'Evaluation' and 'Year-0 $' (add columns to these sheets as needed).User may elect straight-line depreciation and period (d = FCI/period), andsubstitute the value into the depreciation row on sheets 'Evaluation' and'Year-0 $'.Entry = MACRS depreciation as fraction/y of FCIRecovery periodYEAR1234567891011121314151617181920213-year0.3330.4440.1480.074f0.2000.3200.1920.1150.1150.0587-year0.1430.2450.1750.1250.0890.0890.0890.04510-year0.1000.1800.1440.1150.0920.0740.0660.0660.0660.0660.03315-year0.0500.0950.0860.0770.0690.0620.0590.0590.0590.0590.0590.0590.0590.0590.0590.03020-year0.0380.0720.0670.0620.0570.0530.0490.0450.0450.0450.0450.0450.0450.0450.0450.0450.0450.0450.0450.0450.022

Annual TPCANNUAL TOTAL PRODUCT COST AT 100% CAPACITYSee Figure 6-7 and 6-8Default, may be changedSubtotalNotes & commentsUser inputRESULTRequired, may be calculated here, in linked worksheet, or entered manually.Project identifier: Illustration 101Capacity30106 kg per yearFixed Capital Investment, FCI50.114million $ItemDefault factor, user may changeBasisBasis cost, million $/yCost, million $/yRaw materials12.650Operating labor0.885Operating supervision0.15of operating labor0.8850.133Utilities2.025Maintenance and repairs0.06of FCI50.1143.007Operating supplies0.15of maintenance & repair3.0070.451Laboratory charges0.15of operating labor0.8850.133Royalties (if not on lump-sum basis)0.01of co26.6740.267Catalysts and solvents0--0.000Variable cost =19.550Sent to 'Evaluation' andTaxes (property)0.02of FCI50.1141.002'Year-0 $'Financing (interest)0of FCI50.1140.000Insurance0.01of FCI50.1140.501Rent0of FCI50.1140.000DepreciationCalculated separatelyFixed Charges =1.503Plant overhead, general0.6of labor, supervision and maintenance4.0242.415Plant Overhead =2.415Manufacturing cost =23.468Administration0.2of labor, supervision and maintenance4.0240.805Distribution & selling0.05of co26.6741.334Research & Development0.04of co26.6741.067General Expense =3.206TOTAL PRODUCT COST WITHOUT DEPRECIATION = co =26.674Sent to 'Evaluation' and 'Year-0 $'

Calculated by summing all of the terms above that do not depend on co then dividing that sum by the fraction of co represented by all the summed terms, that is (1-d19-d20-d32-d33).

EvaluationECONOMIC EVALUATIONCURRENT, i.e. INFLATED, DOLLARSProject identifier: Illustration 101Construction inflation rate, fraction/y =0.02Expenditures, entries must be negativeProduct price inflation rate, fraction/y =0Default values, can be changedTPC inflation rate, fraction/y =0.02Required, user must supplyAnnual-compounding discount rate, fraction/y = minimum acceptable rate of return, mar =0.15Required, may be calculated here, in linked worksheet, or entered manuallyContinuous-compounding discount rate, fraction/y = minimum acceptable rate of return, rma=0.14Income tax rate =0.35Comments and notes begin in column SRESULTRow SumCOMMENTS & NOTESYear ending at time-3-2-1012345678910Time -3 is default time of estimate, time -2 is the first inflation.1. Land, 106$ (see notes)0.000.000.000.000.00Land can be included, default is 0.2. Fixed Capital Investment, 106$-7.32-17.42-25.38-50.11Time 0 is startup time.3. Working Capital, 106$ (see notes)-8.858.850.00Working capital (-) at time 0, (+) when recovered.4. Salvage Value, 106$0.000.00Salvage value is (+) at time of recovery.5. Total Capital Investment, 106$-7.32-17.42-34.23-58.966. Annual Investment, 106$0.000.000.000.000.000.000.000.000.000.000.00Planned investments (e.g. replacements) entered here at inflated value.7. Start-up cost, 106$-5.01Startup default is 10% of FCI.8. Operating rate, fraction of capacity0.500.901.001.001.001.001.001.001.001.00Two year ramp-up of production.9. Annual sales, 106$25.5045.9051.0051.0051.0051.0051.0051.0051.0051.00479.4010. Annual Total Product Cost, depreciation not included,106$-17.93-26.76-29.45-30.04-30.64-31.25-31.88-32.51-33.17-33.83-297.45Operating rate affects only variable part of TPC.11. Annual depreciation factor, 1/y0.200.3200.1920.1150.1150.058Depreciation default is 5-year MACRS.12. Annual depreciation, 106$/y10.0216.049.625.775.772.8950.1113. Annual Gross Profit, 106$-7.473.1111.9315.1914.5916.8619.1218.4917.8317.17126.82Start costs subtracted here.14. Annual Net Profit, 106$-7.472.027.759.879.4810.9612.4312.0211.5911.1679.82No income tax credit taken for losses.15. Annual operating cash flow,106$2.5618.0617.3815.6515.2513.8512.4312.0211.5911.16129.9316. Total annual cash flow, 106$0.00-7.32-17.42-34.232.5618.0617.3815.6515.2513.8512.4312.0211.5911.1670.97=Annual operating cash flow + Annual investment17. Cumulative cash position, 106$0.00-7.32-24.74-58.96-56.41-38.35-20.98-5.339.9223.7736.2048.2259.8170.97Profitability measures, time value of money NOT included:ROI, PBP and Net return do NOT include recovery amounts, by text definition.18. Return on investment, ave. %/y13.5Compare with ROI =15.0%/y19. Payback period, y3.9Compare with reference PBP =3.6y.20. Net return, 106$-0.86at mar =15.0%/yCompare with net return = 0.Profitability measures including time value of money, with ANNUAL END-OF-YEAR cash flows and discountingNPW and DCFR include recovery amounts, by text definition.21. Present worth factor1.521.321.151.000.870.760.660.570.500.430.380.330.280.25Uses single-year present worth factor from Table 7-3.22. Present worth of annual cash flows, 106$0.00-9.68-20.03-34.232.2213.6511.428.957.585.994.673.933.302.760.53If there is more than one sign change in the annual cash flow, check DCFR value separately.23. Net present worth, 106$ =0.53at discount rate=15.0%/yCompare with net present worth = 0.24. Discounted cash flow rate of return, DCFR, %/y =15.2To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$41, to be made = 0 by changing cell $C$39. Solver must be rerun after a change on any sheet."No value" results from a negative total cash flow in R27. Compare with R5.Iterated discount rate=0.15225. Present worth factor1.531.331.151.000.870.750.650.570.490.430.370.320.280.2426. Present worth of annual cash flows, 106$0.00-9.71-20.06-34.232.2213.6111.378.897.525.934.623.883.252.710.00Profitability measures including time value of money, with CONTINUOUS cash flows and discountingNPW and DCFR include recovery amounts, by text definition.27. Present worth factor1.631.421.231.070.930.810.710.610.530.460.400.350.310.27Uses 1-year present worth factor from Table 7-5.28. Present worth of annual cash flows, 106$0.00-10.39-21.50-36.742.3914.6512.269.608.146.425.024.223.542.960.57If there is more than one sign change in the annual cash flow, check DCFR value separately.29. Net present worth, 106$ =0.57at discount rate=14.0%/yCompare with net present worth =0.30. Discounted cash flow rate of return, DCFR, %/y =14.1To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$51, to be made = 0 by changing cell $C$49. Solver must be rerun after a change on any sheet."No value" results from a negative cash flow in R26. Compare with R6Iterated discount rate=0.14131. Present worth factor1.641.431.241.070.930.810.700.610.530.460.400.350.300.2632. Present worth of annual cash flows, 106$0.00-10.43-21.55-36.772.3814.6212.219.558.086.374.964.173.492.92-0.00

Year-0 $ECONOMIC EVALUATIONCONSTANT, YEAR-0 DOLLARSProject identifier: Illustration 101Construction inflation rate, fraction/y =0.02Expenditures, entries must be negativeProduct price inflation rate, fraction/y =0Default values, can be changedTPC inflation rate, fraction/y =0.02Required, user must supplyAnnual-compounding discount rate, fraction/y = minimum acceptable rate of return, mar =0.15Required, may be calculated here, in linked worksheet, or entered manuallyContinuous-compounding discount rate, fraction/y = minimum acceptable rate of return, rma=0.14Income tax rate =0.35Comments and notes begin in column SRESULTRowCOMMENTS & NOTESYear ending at time-3-2-1012345678910SumTime -3 is default time of estimate, time -2 is the first inflation.1. Land, 106$ (see notes)0.000.000.000.000.00Land can be included by replacing the default 0. Land is (-) at time 0, (+) when recovered2. Fixed Capital Investment, 106$-7.61-17.77-25.38-50.76Time 0 is startup time.3. Working Capital, 106$ (see notes)-8.968.960.00Working capital (-) at time 0, (+) when recovered.4. Salvage Value, 106$0.000.00Salvage value is (+) at time of recovery.5. Total Capital Investment, 106$-7.61-17.77-34.34-59.726. Annual Investment, 106$0.000.000.000.000.000.000.000.000.000.000.00Planned investments (e.g. replacements) entered here at inflated value.7. Start-up cost, 106$-4.98Startup default is 10% of FCI.8. Operating rate, fraction of capacity0.500.901.001.001.001.001.001.001.001.00Two year ramp-up of production.9. Annual sales, 106$25.0044.1248.0647.1246.1945.2944.4043.5342.6741.84428.2110. Annual Total Product Cost, depreciation not included,106$-17.58-25.72-27.75-27.75-27.75-27.75-27.75-27.75-27.75-27.75-265.31Operating rate affects only variable part of TPC.11. Annual depreciation factor, 1/y0.200.3200.1920.1150.1150.058Depreciation default is 5-year MACRS.12. Annual depreciation, 106$/y9.9515.619.185.405.302.6048.0413. Annual Gross Profit, 106$-7.512.7911.1213.9613.1514.9416.6515.7814.9214.09109.8814. Annual Net Profit, 106$-7.511.817.239.088.549.7110.8210.259.709.1668.80No income tax credit taken for losses.15. Annual operating cash flow,106$2.4417.4216.4114.4813.8412.3110.8210.259.709.16116.8416. Total annual cash flow, 106$0.00-7.61-17.77-34.342.4417.4216.4114.4813.8412.3110.8210.259.709.1657.12=Annual investment + Annual operating cash flow17. Cumulative cash position, 106$0.00-7.61-25.38-59.72-57.28-39.85-23.44-8.964.8817.1828.0138.2647.9657.12Profitability measures, time value of money NOT included:ROI, PBP and Net return do NOT include recovery amounts, by text definition.18. Return on investment, ave. %/y11.5Compare with ROI =15.0%/y19. Payback period, y4.3Compare with reference PBP =3.6y.20. Net return, 106$-2.08at mar =15.0%/yCompare with net return = 0.Profitability measures including time value of money, with ANNUAL END-OF-YEAR cash flows and discountingNPW and DCFR include recovery amounts, by text definition.21. Present worth factor1.521.321.151.000.870.760.660.570.500.430.380.330.280.25Uses single-year present worth factor from Table 7-3.22. Present worth of annual cash flows, 106$0.00-10.07-20.43-34.342.1213.1810.798.286.885.324.073.352.762.26-5.83If there is more than one sign change in the annual cash flow, check DCFR value separately.23. Net present worth, 106$ =-5.83at discount rate=15.0%/yCompare with net present worth = 0.24. Discounted cash flow rate of return, DCFR, %/y =12.9To get DCFR, go to "Tools" and function "Solver." Set target cell as $R$41, to be made = 0 by changing cell $C$39. Solver must be rerun after a change on any sheet."No value" results from a negative total cash flow in R27. Compare with R5.Iterated discount rate=0.12925. Present worth factor1.441.271.131.000.890.780.690.620.540.480.430.380.340.3026. Present worth of annual cash flows, 106$0.00-9.71-20.06-34.342.1613.6711.408.917.545.944.633.883.252.720.00Profitability measures including time value of money, with CONTINUOUS cash flows and discountingNPW and DCFR include recovery amounts, by text definition.27. Present worth factor1.631.421.231.070.930.810.710.610.530.460.400.350.310.27Uses 1-year present worth factor from Table 7-5.28. Present worth of annual cash flows, 106$0.00-10.81-21.93-36.862.2814.1411.588.887.395.714.373.602.962.43-6.26If there is more than one sign change in the annual cash flow, check DCFR value separately.29. Net present worth, 106$ =-6.26at discount rate=14.0%/yCompare with net present worth =0.30. Discounted cash flow rate of return, DCFR, %/y =12.1To get DCFR, go to "Tools" and function "Solver." Set target cell as $R51, to be made = 0 by changing cell $C$49. Solver must be rerun after a change on any sheet."No value" results from a negative cash flow in R26. Compare with R6Iterated discount rate=0.12131. Present worth factor1.531.361.201.060.940.830.740.650.580.510.450.400.360.3232. Present worth of annual cash flows, 106$0.00-10.32-21.33-36.512.3014.5312.129.478.026.324.924.133.462.89-0.00