financial analysis

Technological Institute of the Philippines

FINANCIAL ANALYSIS

This is an outline of the economic considerations, which are necessary when preparing an estimate of the capital investment or total product cost for a new venture or project.

Methods for obtaining predesign cost estimates has purposely been emphasized because the latter are extremely important for determining the feasibility of proposed investment and to compare alternative designs. The predesign estimates are based partially on

approximate percentages or factor that are applicable to a particular plant or process under consideration.

USE OF COST INDEXES

A cost index is merely an index value for a given period point in time showing the cost at

that time relative to a certain base time. If the cost at some time in the past is known, the equivalent cost at the present time can be determined by multiplying the original cost by the ratio of the present index value to the index value applicable when the original cost

was obtained.

For the Manufacture of Ammonium Nitrate by Prilling Process from Ammonia and Nitric acid, we used the Marshall and Swift Equipment Cost Indexes projected to 2013. We used the projections cost index

Marshall and Swift Installed Equipment Indexes (Reference: Chemical Engineering

Plant Cost Index)

YEAR X is the number of years since 2005

Y is the CEPCI

2005 0 468.2

2006 1 499.6

2007 2 525.4

2008 3 575.4

2009 4 521.9

2010 5 550.8

2011 6 585.7

2012 7 584.6

2013 8 567.6


By plotting the data above, we could get the cost index for the year 2015,

Using the Equation above

𝑦 = −0.1211𝑥 6 + 2.051𝑥 5 − 11.509𝑥 4 + 22.461𝑥 3 − 6.5617𝑥 2 + 20.605𝑥+ 468.76

Where:

X=3

𝑦 = −0.1211(3)6 + 2.051(3)5 − 11.509(3)4 + 22.461(3)3 − 6.5617(3)2

+ 20.605(3) + 468.76

𝒚 = 𝟓𝟓𝟓.𝟖𝟓 (𝑪𝒐𝒔𝒕 𝒊𝒏𝒅𝒆𝒙 𝒇𝒐𝒓 𝒚𝒆𝒂𝒓 𝟐𝟎𝟏𝟓)

𝑪𝒐𝒔𝒕 𝑰𝒏𝒅𝒆𝒙 𝒂𝒕 𝟐𝟎𝟎𝟐 = 𝟑𝟗𝟓.𝟔

Exchange Rate (Source: www.bsp.gov.ph)

Unite States Dollar (USD) Philippine Peso (Php)

$1 Php 46.831

As of October 1, 2015


Cost Estimation

Estimation of Capital Investment

Plant Capacity:10000 kg/day

Plant Operation: 300 days/year at 8 hours/day

TOTAL COST OF PURCHASED EQUIPMENT

Equipment No. of

Equipment Total Cost Unit

Silo 1 374,648.00 PhP

Neutralizer 1 1,986,439.89 PhP

Vibrating Screen 1 448,547.32 PhP

Prill Tower 1 46,350,500.00 PhP

Dryer 1 2,056,872.78 PhP

Mixer 1 140,498.00 PhP

Flash Drum Evaporator 1 1,030,282.00 PhP

Evaporator 1 38,624,589.38 PhP

Shell and Tube Heat Exchanger (V-001) 1 573,283.56 PhP

Shell and Tube Heat Exchanger (HEX-001) 1 103,480.39 PhP



Double Pipe Heat Exchanger (HEX-003) 1 535,319.07 PhP



Rotary Cooler 1 468,310.00 PhP

Screw Conveyor 4 515,141.00 PhP

Total Purchase Equipment Cost w/ Delivery Cost 94,490,166.65 PhP


Cost of Equipment

* Using the McGraw Hill Online Cost Estimator

1. SILO

Heat transfer area: m2 Materials of Construction: Cost2002: PhP 374,648.00

Solving for Cost2015

Cost2015 = Cost 2002 (cost index at 2015

cost index at 2002)

Cost2015 = 374,648.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟓𝟐𝟔,𝟒𝟏𝟎.𝟕𝟓

2. NEUTRALIZER

Heat transfer area: m2 Materials of Construction: Carbon Steel Cost2002: PhP 1,986,439.89



cost index at 2002)

Cost2015 = 1,986,439.89 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟐,𝟕𝟗𝟏,𝟏𝟎𝟖.𝟕𝟑 3. VIBRATING SCREEN




cost index at 2002)

Cost2015 = 448,547.32 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟔𝟑𝟎,𝟐𝟒𝟓.𝟐𝟕

4. PRILL TOWER Heat transfer area: m2

Materials of Construction: Cost2002: PhP 46,350,500.00 Solving for Cost2015


cost index at 2002)

Cost2015 = 46,350,500.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟔𝟓,𝟏𝟐𝟔,𝟐𝟎𝟏.𝟕𝟖


5. DRYER Heat transfer area: m2 Materials of Construction:

Cost2002: PhP 2,056,872.78 Solving for Cost2015


cost index at 2002)

Cost2015 = 2,056,872.78 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟐,𝟖𝟗𝟎,𝟎𝟕𝟐.𝟔𝟒 6. MIXER




cost index at 2002)

Cost2015 = 140,498.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟏𝟗𝟕,𝟒𝟏𝟏.𝟎𝟓 7. FLASH DRUM EVAPORATOR

Heat transfer area: m2 Materials of Construction:

Cost2002: PhP 1,030,282.00 Solving for Cost2015


cost index at 2002)

Cost2015 = 1,030,282.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟏,𝟒𝟒𝟕,𝟔𝟐𝟗.𝟓𝟓 8. EVAPORATOR

Heat transfer area: 40.93 m2 Materials of Construction: Carbon Steel & Stainless Steel Cost2002: PhP 38,624,589.38



cost index at 2002)

Cost2015 = 38,624,589.38 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟓𝟒𝟐𝟕𝟎𝟔𝟕𝟐.𝟒𝟏


9. SHELL AND TUBE HEAT EXCHANGER (V-001) Heat transfer area: m2 Materials of Construction:

Cost2002: PhP 573,283.56 Solving for Cost2015


cost index at 2002)

Cost2015 = 573,283.56 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟖𝟎𝟓,𝟓𝟎𝟗.𝟕𝟕 10. SHELL AND TUBE HEAT EXCHANGER (HEX-001)




cost index at 2002)

Cost2015 = 103,480.39 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟏𝟒𝟓,𝟑𝟗𝟖.𝟑𝟐

11. SHELL AND TUBE HEAT EXCHANGER (HEX-002) Heat transfer area: 3.8704 m2 Materials of Construction: 304 Stainless Steel



cost index at 2002)

Cost2015 = 628,634.99 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟖𝟖𝟑,𝟐𝟖𝟑.𝟎𝟏 12. SHELL AND TUBE HEAT EXCHANGER (HEX-006)




cost index at 2002)

Cost2015 = 137,636.31 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟏𝟗𝟑,𝟑𝟗𝟎.𝟏𝟓


13. DOUBLE PIPE HEAT EXCHANGER (HEX-003) Heat transfer area: m2 Materials of Construction:



cost index at 2002)

Cost2015 = 535,319.07 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟕𝟓𝟐,𝟏𝟔𝟔.𝟔𝟎 14. DOUBLE PIPE HEAT EXCHANGER (HEX-004)




cost index at 2002)

Cost2015 = 257,991.98 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟑𝟔𝟐,𝟒𝟗𝟗.𝟔𝟎 15. DOUBLE PIPE HEAT EXCHANGER (HEX-005)

Heat transfer area: m2 Materials of Construction:



cost index at 2002)

Cost2015 = 257,991.98 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟑𝟔𝟐,𝟒𝟗𝟗.𝟔𝟎 16. ROTARY COOLER

Heat transfer area: 2.66 m2 Materials of Construction: Cost2002: PhP 468,319.00



cost index at 2002)

Cost2015 = 468,319.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟔𝟓𝟖,𝟎𝟐𝟔.𝟎𝟖


17. SCREW CONVEYOR (4 UNITS) Heat transfer area: m2 Materials of Construction:



cost index at 2002)

Cost2015 = 515,141.00 (555.85

395.6)

𝑪𝒐𝒔𝒕𝟐𝟎𝟏𝟓 = 𝑷𝒉𝑷 𝟕𝟐𝟑,𝟖𝟏𝟑.𝟑𝟕

It is assumed that delivery charges are 5% of the purchased price.

𝑇𝑜𝑡𝑎𝑙 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 𝐶𝑜𝑠𝑡 = 𝑃ℎ𝑝 132,766,338.7

𝑇𝑜𝑡𝑎𝑙 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 𝐶𝑜𝑠𝑡 𝑤𝑖𝑡ℎ 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑦 𝐶𝑜𝑠𝑡

= 𝑃ℎ𝑝 132,766,338.7 + (0.05 𝑥 𝑃ℎ𝑝 132,766,338.7)

𝑻𝒐𝒕𝒂𝒍 𝑷𝒖𝒓𝒄𝒉𝒂𝒔𝒆𝒅 𝑪𝒐𝒔𝒕 𝒘𝒊𝒕𝒉 𝑫𝒆𝒍𝒊𝒗𝒆𝒓𝒚 𝑪𝒐𝒔𝒕 (𝑷𝑹𝑶𝑪𝑬𝑺𝑺𝑰𝑵𝑮 𝑬𝑸𝑼𝑰𝑷𝑴𝑬𝑵𝑻)

= 𝑷𝒉𝑷 𝟏𝟑𝟗,𝟒𝟎𝟒,𝟔𝟓𝟓.𝟔𝟎


Instrumentation and Control Cost

The scope of the instrumentation and control cost comprises the purchase and installation labor cost of auxillary machines, such as pressure and temperature gauges or flow controller, used to control equipment.

Total Instrumentation Cost (Alibaba.com)

Name of Instrumentation No. of Units

Price per unit, Php

Total Price, Php

Ball Valve 10

Check Valve 3

Conveyor Speeder 15

Flow Controller 3

Flow Transmitter 3

Level Transmitter 10

Orifice 3

Pump 3

Speed Controller 15

Summation controller 3

Temperature transmitter 2

Transducer 16

Weight Controller 10

Weight Transmitter 14

Total 6,024,000.00


I.DIRECT COSTS

Installation Cost

The scope of the installation cost of the equipment comprises the cost of foundation

support platforms, labor cost, construction related expense, and other factors related to the erection of the purchased equipment.

Basis: for a solid processing plant, 45% of the delivered equipment cost is the amount of the purchased equipment installed.

𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 𝐸𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛= 0.45 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 𝐸𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛 = 0.45 𝑥 𝑃ℎ𝑝 139,404,655.60

𝑷𝒖𝒓𝒄𝒉𝒂𝒔𝒆𝒅 𝑬𝒒𝒖𝒊𝒑𝒎𝒆𝒏𝒕 𝑰𝒏𝒔𝒕𝒂𝒍𝒍𝒂𝒕𝒊𝒐𝒏 = 𝑷𝒉𝒑 𝟔𝟐,𝟕𝟑𝟐,𝟎𝟗𝟓.𝟎𝟐

Piping and Conveyor Installation

The scope of the piping and conveyor installation comprises the labor cost of installation, cost of pipes, valves, fittings and all other piping and conveyor requirements.

Basis: 31% of the cost of purchased equipment delivered is the piping and conveyor cost installation.

𝑃𝑖𝑝𝑖𝑛𝑔 𝑎𝑛𝑑 𝑐𝑜𝑛𝑣𝑒𝑦𝑜𝑟 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛= 0.16 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑃𝑖𝑝𝑖𝑛𝑔 𝑎𝑛𝑑 𝑐𝑜𝑛𝑣𝑒𝑦𝑜𝑟 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛 = 0.31 𝑥 𝑃ℎ𝑝 139,404,655.60

𝑷𝒊𝒑𝒊𝒏𝒈 𝒂𝒏𝒅 𝒄𝒐𝒏𝒗𝒆𝒚𝒐𝒓 𝒊𝒏𝒔𝒕𝒂𝒍𝒍𝒂𝒕𝒊𝒐𝒏 = 𝑷𝒉𝒑 𝟒𝟑,𝟐𝟏𝟓,𝟒𝟒𝟑.𝟐𝟒

Electrical Systems

The scope of the electrical system cost comprises the power, wiring, lightning,

transformation, service and instrumentation and control wiring.

Basis: 10% of the delivered equipment cost is the installed electrical system cost.

𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑎𝑙 𝑠𝑦𝑠𝑡𝑒𝑚 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛

= 0.10 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑒𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑎𝑙 𝑠𝑦𝑠𝑡𝑒𝑚 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛 = 0.10 𝑥 𝑃ℎ𝑝 139,404,655.60

𝒆𝒍𝒆𝒄𝒕𝒓𝒊𝒄𝒂𝒍 𝒔𝒚𝒔𝒕𝒆𝒎 𝒊𝒏𝒔𝒕𝒂𝒍𝒍𝒂𝒕𝒊𝒐𝒏 = 𝑷𝒉𝑷 𝟏𝟑,𝟗𝟒𝟎,𝟒𝟔𝟓.𝟓𝟔


Yard Improvement

The scope of the yard improvement comprises the roads, grading,fencing, sidewalks, railroads, sidings, landscaping, and any other similar items related to yard improvements.

Basis: for a solid processing plant, 15% of the delivered equipment cost is the yard improvement cost.

𝑦𝑎𝑟𝑑 𝑖𝑚𝑝𝑟𝑜𝑣𝑒𝑛𝑡 = 0.15 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑦𝑎𝑟𝑑 𝑖𝑚𝑝𝑟𝑜𝑣𝑒𝑛𝑡 = 0.15 𝑥 𝑃ℎ𝑝 139,404,655.60

𝒚𝒂𝒓𝒅 𝒊𝒎𝒑𝒓𝒐𝒗𝒆𝒏𝒕 = 𝑷𝒉𝑷 𝟐𝟎,𝟗𝟏𝟎,𝟔𝟗𝟖.𝟑𝟒

Service Facilities

The scope of service facilities comprises the utilities for supplying steam, water, power, and fuel for the chemical processes and operations. Fire protection, waste disposal and

miscellaneous service items such as shops, clinics or first aid quarters, and cafeterias require capital investment that are included under general heading of service facilities.

Basis: For a solid processing plant, the 40% of the delivered equipment cost is the service facility cost.

𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑓𝑎𝑐𝑖𝑙𝑖𝑡𝑦 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛= 0.40 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑓𝑎𝑐𝑖𝑙𝑖𝑡𝑦 𝑖𝑛𝑠𝑡𝑎𝑙𝑙𝑎𝑡𝑖𝑜𝑛 = 0.40 𝑥 𝑃ℎ𝑝 139,404,655.60

𝒔𝒆𝒓𝒗𝒊𝒄𝒆 𝒇𝒂𝒄𝒊𝒍𝒊𝒕𝒚 𝒊𝒏𝒔𝒕𝒂𝒍𝒍𝒂𝒕𝒊𝒐𝒏 = 𝑷𝒉𝒑 𝟓𝟓𝟕𝟔𝟏𝟖𝟔𝟐.𝟐𝟒

Total Direct Plant Cost:

𝑷𝒉𝒑 = 𝟏𝟕𝟒𝟒𝟓𝟐𝟓𝟎𝟒.𝟖

INDIRECT COSTS

Engineering and Supervision


The scope of the engineering and supervision comprises the internal or licensed software, computer-aided drafts, purchasing, accounting, travel, and the plant

supervisory services.

Basis: for a solid processing plant, 33% of the delivered equipment cost is the

engineering and supervision cost.

𝑒𝑛𝑔𝑖𝑛𝑒𝑒𝑟𝑖𝑛𝑔 𝑎𝑛𝑑 𝑠𝑢𝑝𝑒𝑟𝑣𝑖𝑠𝑖𝑜𝑛

= 0.33 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑒𝑛𝑔𝑖𝑛𝑒𝑒𝑟𝑖𝑛𝑔 𝑎𝑛𝑑 𝑠𝑢𝑝𝑒𝑟𝑣𝑖𝑠𝑖𝑜𝑛 = 0.33 𝑥 𝑃ℎ𝑝 119,452,840.3

𝒆𝒏𝒈𝒊𝒏𝒆𝒆𝒓𝒊𝒏𝒈 𝒂𝒏𝒅 𝒔𝒖𝒑𝒆𝒓𝒗𝒊𝒔𝒊𝒐𝒏 = 𝑷𝒉𝒑 𝟑𝟗𝟒𝟏𝟗𝟒𝟑𝟕.𝟖𝟏

Construction Expenses The scope of the construction expenses comprises the cost construction labor and other construction related expenses such as the construction tools and rentals,

construction payroll, construction tariffs, insurance and permits, miscellaneous equipment installation and other fees related to the construction process. Basis: for solid processing plant, 39% of the delivered equipment cost is the

construction expenses

𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 = 0.39 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 = 0.39 𝑥 𝑃ℎ𝑝 119,452,840.3

𝒄𝒐𝒏𝒔𝒕𝒓𝒖𝒄𝒕𝒊𝒐𝒏 𝒆𝒙𝒑𝒆𝒏𝒔𝒆𝒔 = 𝑷𝒉𝒑 𝟒𝟔𝟓𝟖𝟔𝟔𝟎𝟕.𝟕𝟑

Legal Expenses

The scope of legal expenses comprises the costs related to the processing of land purchase, equipment purchase, and contracts of construction. Understanding and

proving compliance to government requirements, such as environmental and safety measures requirements constitute major sources of legal cost.

Basis: for solid processing equipment, 4% of the delivered equipment cost is the legal expenses.

𝑙𝑒𝑔𝑎𝑙 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 = 0.04 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑙𝑒𝑔𝑎𝑙 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 = 0.04 𝑥 𝑃ℎ𝑝 119,452,840.3

𝒍𝒆𝒈𝒂𝒍 𝒆𝒙𝒑𝒆𝒏𝒔𝒆𝒔 = 𝑷𝒉𝒑 𝟒𝟕𝟕𝟖𝟏𝟏𝟑.𝟔𝟏𝟑

Contractor’s Fee


The scope of the contractor’s fee includes the payment given to the construction company hired for the construction of the plant.

Basis: for solid processing equipment, 17% of the delivered equipment cost is the contractor’s fee.

𝑐𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑜𝑟′𝑠𝑓𝑒𝑒 = 0.17 𝑥 (𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 − 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡)

𝑐𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑜𝑟′𝑠𝑓𝑒𝑒 = 0.17 𝑥 𝑃ℎ𝑝 119,452,840.3

𝒄𝒐𝒏𝒕𝒓𝒂𝒄𝒕𝒐𝒓′𝒔𝒇𝒆𝒆 = 𝑷𝒉𝒑 𝟐𝟎𝟑𝟎𝟔𝟗𝟖𝟐.𝟖𝟓 Contingency

The scope of the contingency comprises the estimation of the project cost in recognition of the fact that unexpected events and expenses that inevitably increase the cost of the project might arise during the erection of the plant. Inevitable events

such as storm, flood, transportation accidents, strikes, price changes, errors of the estimation, and unforeseen expenses may occur.

Basis: 37% of the purchase equipment delivered is the contingency.

𝑐𝑜𝑛𝑡𝑖𝑛𝑔𝑒𝑛𝑐𝑦 = 0.37(𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑒𝑞𝑢𝑖𝑝𝑚𝑒𝑛𝑡 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑)

𝑐𝑜𝑛𝑡𝑖𝑛𝑔𝑒𝑛𝑐𝑦 = 0.37 𝑥 𝑃ℎ𝑝 119,452,840.3

𝒄𝒐𝒏𝒕𝒊𝒏𝒈𝒆𝒏𝒄𝒚 = 𝑷𝒉𝒑 𝟒𝟒𝟏𝟗𝟕𝟓𝟓𝟎.𝟗𝟐

Total Indirect Plant Cost:

𝑷𝒉𝒑 = 𝟏𝟓𝟓𝟐𝟖𝟖𝟕𝟖𝟒

RAW MATERIALS

Anyhdrous Liquid Ammonia

𝐶 = (2528.45 𝑘𝑔

𝑑𝑎𝑦𝑥

1 𝑑𝑎𝑦

24 ℎ𝑟𝑠) 𝑥 2400 ℎ𝑟𝑠 𝑥

₱ 43.51

𝑘𝑔= ₱ 𝟏𝟏,𝟎𝟎𝟏,𝟐𝟖𝟓.𝟗𝟓

Nitric Acid (55 % solution)

𝐶 = (13629.32 𝑘𝑔

𝑑𝑎𝑦𝑥

1 𝑑𝑎𝑦


₱ 5.50

𝑘𝑔= ₱ 𝟕,𝟒𝟗𝟔,𝟏𝟐𝟔

Dolomite


𝐶 = (431.1092 𝑘𝑔

𝑑𝑎𝑦𝑥

1 𝑑𝑎𝑦


₱2.07

𝑘𝑔= ₱ 𝟖𝟗,𝟐𝟑𝟗.𝟔𝟎

Total Raw Materials Cost = 18,586,651.55

𝐹𝑖𝑥𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐶𝑜𝑠𝑡𝑠 = 𝐷𝑖𝑟𝑒𝑐𝑡 𝐶𝑜𝑠𝑡 + 𝐼𝑛𝑑𝑖𝑟𝑒𝑐𝑡 𝐶𝑜𝑠𝑡 𝑃ℎ𝑝 = 174452504.8 + 155288784

𝑭𝑪𝑪 = ₱𝟑𝟐𝟗𝟕𝟒𝟏𝟐𝟖𝟖.𝟖

𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 = 𝐹𝑖𝑥𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 + 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙

= 329741288.8 +18,586,651.55

𝑻𝑪𝑪 = ₱ 𝟑𝟒𝟖𝟑𝟐𝟕𝟗𝟒𝟎.𝟒

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