Cost Estimation An acceptable plant design must present a process that is capable of operating under conditions which will yield a profit. Since Net Profit equals total income minus all expenses, it is essential that the Chemical Engineer be aware of the many different types of costs inoled in manufacturing processes. A Capital Capital !nestment is required required for any industrial industrial process and determination of the necessary inestment is an important part of a plant design design pro"ect. #he total inestment for any process consists of $ixed Capital !nestment for physical equipment and facilities in the p lant plus wor%ing capital which must be aailable to pay salaries, %eep raw materials and products on hand and handle other special items requiring a direct cash outlay. outlay. #hus in an analysis including income taxes must be ta%en into consideration. #his report includes a detailed estimation of Costs incurred in a &anufacturing Plant for the production of Actie Pharmaceutical !ngredients 'AP!(s) extracted from Natural Plant Sources. A detailed detailed list required 'based on the current data) has been included in each sheet, ma%ing it feasible to add or delete data shown in - ellow-. ellow-. After successful addition or deletion deletion of data in the sheets, a detailed spreadsheets, spreadsheets, Profitability Analysis *eports can be obtained proiding Aerage Aerage Net Profit, Pay +ac% Period, *ate of *eturn, nit Product Cost. All the amounts taken in the worksheets are in Rs.
Cost Estimation Estimation of Capital Investment A detailed estimate is carried carried out based on the current data aailable. aailable. #he +rea% down of $ixed Capital !nestment items are detailed as follows. /) Purchased Equipment S. No. / 5 3 2 1 0 8 7 6 /4 // /5 /3 /2 /1 /0 /8 /7 /6 54 5/ 55 53
Equip. Name
Nos. / / / / / / / 5 5 3 / / 6 5 / 5 / / / / /4 7 3
Price in Rs. 012,344 184,444 217,4/4 582,740 /60,564 2/5,546 130,831 327,477 537,/01 242,318 //8,882 87,1/0 577,120 530,718 31,335 08,505 54,632 15,322 /7,416 /5,235 /52,3/8 /30,461 60,/75
Total otal Cost Cost of Purc Purcha hase sed d Equ Equipme ipment nt
!"#$ !"#$!" !"%& %&# #
*E *$E 9 $E 30- Centrifuge 52- Centrifuge 52- Centrifuge <&P SS3/0 *eactor 1.4:; SS342 *eactor /.5:; SS342 *eactor 034lts SS342 *eactor 344lts SS342 *eactor /14lts SS342 S# 2.4:; SS342 E 0m5 SS342 S# 8.4:; SS342 S# /.4:; SS342 S# 144lts SS342 Steam pan /14lts SS342 E /4m5 SS342 *eceier 344lts SS342 P #an% 544lts SS342 *eceier 544lts SS342 E 5m5 SS342 S# 144lts
S. No. 52 51 50 58 57 56 34 3/ 35 33 32
Equip. Name SS342 *eceier /44lts SS342 *eceier 81lts SS342 Stand &S S# 0.4:; &S S# 144lts SS342 =#> 52 #rays SS342 <&P =#>?52# SS342 &ulti &ill <&P SS342 && <&P *@> SS342 Candle $ilters SS342 *eceier 514lts
Nos. 3 / / 5 5 / / / / 5 /
Price in Rs. 56,730 8,715 6,/04 84,002 51,1/7 518,/36 3/4,863 36,517 55,644 50,/85 /6,056
5) Purchased Equipment !nstallation !nstallation of all equipments listed, structural sup ports, insulation, paint '#a%en '#a%en as 51B of the Purchased equipment cost)
#%'$#&(.)%
3) !nstrumentation and Controls S. No. / 5 3 2 1 0 8 7 6 /4 // /5
*escription Pressure
Controller $;P #emp. Scanner 5D5 Pheumatic P. ale
Nos. 22 8 0 5/ / 11 7 3 7 / 5 2
Total Cost of Instrumentation and Controls
Price in Rs. //,6/7 5,/72 7,540 1,768 /,315 2,180 5,474 7,270 37,760 /7,515 50,323 05,244
#$+"%$+
2) Piping a) Process Piping S. No. / 5 3 2
*escription &S Pipes 'all siFes) SS Pipes 'all siFes) P=C Pipes and $ittings
Total Cost of Process Pipin,
Nos. Price in Rs. 304 204,876 88.3 008,205 ;umpsum 27,058 27 5/,381
#"#$-"(%&
S. No.
*escription
Nos. Price in Rs.
b) Pipe angers, $ittings, =ales, +eams, Channels etc. S. No. / 5 3 2 1 0 8 7 6 /4 // /5 /3 /2 /1 /0 /8 /7 /6 54 5/ 55 53 52 51 50 58 57 56 34 3/ 35 33 32 31 30 38 37 36 24 2/ 25 23 22 21 20
*escription +eams, Channels, Angles, Chec%ered Plates etc. &S $langes E?type &S >ummyD+lind $langes E?type &S Short +ends &S ;ong +ends &S #hreaded Nipples &S +all =ale ummy $langes E?type SS 3/0 9elding *ods ESA+ 347 ummy Plugs 3D7
Nos. Price in Rs. /0,114%gs 117,103 /186 /75,428 71 /5,650 050 31,351 24 /,181 575 /8,6/4 /85 /31,214 51 33,814 /4 //,514 7 /74 26 0,7/7 261%gs 5/,8/7 /4%gs 551 /4 52,284 /5 58,444 /84 /,134 /20 /,744 /0 /,424 3 140 83.1%gs 1,382 /8 38,744 6 /0,781 /1 /1,844 /24%gs 3,637 526 ///,878 /01 53,/70 632 /82,662 15 8,412 0 3/,144 0 33,814 /2/ 03,105 /4 105 /18 527,544 55 32,544 26 8,058 /4 55,144 288.7%gs /2,081 /44 3,/14 / 547 / /2,051 / /5,381 31%gs /6,078 /0 6,444 54 551 04 /,606 /4/ 5,180
S. No. 28 27 26 14 1/ 15 13 12 11
*escription ummy Plugs SPSA/45A $loat #rap /P>SPSA542A ?type SDE Strainer /2-x/2- C! &an holes
Nos. Price in Rs. 31 5,/38 2 08 /11 0,740 144gms //3 27 621 2 58,444 2 //,514 /4 8,781 ;umpsum 103
Total Cost of Pipe an,ers" /ittin,s" 0alves" 1eams" Channels etc.
("+')"$&-
c) !nsulation ? Piping, Equipment S. No. / 5 3 2 1 0 8 7
*escription Nos. Price in Rs. &ineral 9ool 24bags 30,444
#otal cost of !nsulation ?
Total Cost of Pipin, includin, a" 2" 3 c
301,440
&"!##"#$)
1) Electrical Equipment and &aterials a) Electrical equipment ? switches, motors, conduit, wire, fitting etc., S. No. / 5 3 2 1 0 8 7 6 /4 // /5 /3 /2 /1 /0 /8 /7 /6 54 5/ 55 53 52 51 50 58 57 56 34
*escription Panel +oards Electrical Access. !n panel boards ;ighting, lamps, tubes @ ouble &.Seal C< 1.4P &onobloc pumpset C< 8.1P &onobloc pumpset C< 3.4P &onobloc pumpset #win screw pump /.4P '#ushaco) #win screw pump /.1P '#ushaco) :irlos%ar 3.4P &onobloc pumpset C< 8.1P $;P &otor C< /.4P $;P &otor C< /.4P N$;P &otor C< 5.4P $;P &otor Centrifugal process pumps /.4P Centrifugal process pumps 5.4P igh =acuum Pump 1.4P
Total Cost of Electrical Equipment
Nos. 1 ;umpsum ;umpsum /4 /5 34 2581mts 5 5 /2.5%gs 544 /1coils 3 3 /51mts 354sets 5 0 3 5 / / / / 8 2 5 // 5 /
&"&(+"$()
Price in Rs. 57/,514 //5,144 /07,814 10,514 04,814 54,514 /,8/1,051 551 5,514 866 3,638 7,237 /1,814 2,144 21,444 338 /42,444 /52,744 87,444 31,304 76,587 76,587 /1,044 58,274 /46,544 12,474 2/,044 57,044 0,524 54,744
b) Electrical materials and labor S. No. / 5
*escription ;abor of Excaation ;abor for Electrical wiring
Total Cost for Electrical 4aterials and la2or
Nos. ;umpsum ;umpsum
Price in Rs. 5,514 //5,144
##'")%+
Total Cost for Electrical Equipment and 4aterials includin, a and 2
&"'&%"!))
0) +uildings '!ncluding Serices) a) Process +uildings #otal Price incurred in constructing Process +uildings
'"+++"+++
b) Auxiliary +uildings #otal Price incurred in Auxiliary buildings
+
c) &aintenance Shops #otal Price incurred in &aintenance Shops
+
d) +uilding Serices S.No. *escription / Plumbing wor% 'labor charges) 5 Air andling nits '=AC) 3 Paint &aterial 2 ;abor charges for painting
#otal cost for +uilding serices
Nos. ;umpsum 5 ;umpsum ;umpsum
Price in Rs. /1,444 338,144 /4,6/5 54,444
373,2/5
Total Cost for 1uildin,s includin, a" 2" c 3 d
'"&-&"'#(
8) ard !mproements Site >eelopment ? site clearing, grading, roads, wal%ways etc. S. No. / 5 3 2
*escription Site Clearing *oads 9al%ways ;andscaping
Total Cost for 5ard Improvements
Nos. ;umpsum ;umpsum ;umpsum ;umpsum
Price in Rs. /4,444 34,444 /1,444 /1,444
)+"+++
7) Serice $acilitites a @ b) tilities and $acilities S. No. / 5 3 2 1 0 8 7 6 /4 // /5
*escription +orewell and Pumpset P;S#; >PE tan%s >istribution #ransformer 244:=A 52#* aircooled pac%aged chiller SS water "et acuum system 84:=A %irlos%ar ma%e generator E;
Nos. ;umpsum 5 / / 1 / / 5 / 5 5 5
Price in Rs. 14,444 /4,/51 345,114 276,381 72,381 /07,814 55,144 /0,781 33,814 178,014 21,444 87,814
#otal Cost of tilities and $acilities
/,776,844
c) Non Process Equipment S. No. / 5 3 2 1 0 8 7 6 /4
*escription $C /744 $*P $ume Chamber and base Pharma *oom >oors 'Steel >oors) >oors and 9indows
Nos. / 5 ;umpsum 3444sft 3444sft 5444sft 5444sft 3 ;umpsum ;umpsum
Price in Rs. /01,788 28,514 14,444 /1/,781 12,444 21,444 /0,444 33,814 551,444 33,814
#otal Cost of Non Process Equipment
755,145
d) >istribution and Pac%aging Already !ncluded in !tem No. / and 0
4
Total Cost of Service /acilities includin, a" 2" c 3 d
(")#("(+(
6) ;and ? Sureys and fees, Property cost The cost of 6and is taken as '7 of the Total Purchased Equipment cost
(')-!#.('
Total *irect Costs 8*9 S. No. / 5 3 2 1 0 8 7 6
*escription Purchased Equipment Purchased Equipment !nstallation !nstrumentation and Controls Piping Electrical Equipment and &aterials +uildings '!ncluding serices) ard !mproements Serice $acilities ;and
Total *irect Costs 8*9
:rand Total in Rs. 0,/60,13/ /126/35.81 /64,164 3,0//,/68 3,231,088 2,373,2/5 84,444 5,8/5,545 52870/.52 (("&$!"!+&
!ndirect Costs /) Engineering and Superision #otal Engineering and Superision cost is ta%en as 7B of the #otal >irect Cost
#)$#)(-.(&$
#%!))!(.(+$
###$-&+.#%
(&&)+&!.-&'
5) Construction Expenses #otal Construction Expenses cost is ta%en as 8B of the #otal >irect Cost 3) Contractor(s $ee #otal Contractor(s fee is ta%en as 1B of the #otal >irect Cost 2) Contingency #otal Contingency cost is ta%en as 7B of the #otal >irect and !ndirect cost
Total Indirect Costs 8I9 S.No. / 5 3 2
*escription Engineering and Superision Construction Expenses Contractor(s $ee Contingency
Total Indirect Costs 8I9
:rand Total in Rs. /86/857.5365 /108805.5463 ///6734./261 5338430.733836/3
!-#!&%).'&#)&$#&
/i;ed Capital Investment 8/CI9" * < I
($"(#("$!+
=orkin, Capital 8=C9" #%7 of TCI
%#%%((-.&+$)#-!)
Total Capital Investment 8TCI9
&'&!-#--.)&#'%)-
Spreadsheet for Estimation of Total Capital Investment S. No.
*escription
Cost in Rs.
Cost in Rs.
Cost in Rs.
*irect Costs /
Purchased Equipment
5
Purchased Equipment !nstallation
0,/60,13/
3
!nstrumentation and Controls
2
Piping
3,0//,/68
1
Electrical Equipment and &aterials
3,231,088
0
+uildings '!ncluding serices)
2,373,2/5
8
ard !mproements
7
Serice $acilities
6
;and
/126/35.81 /64,164
84,444 5,8/5,545 52870/.52
Total *irect Costs 8*9
(("&$!"!+&
Indirect Costs /4
Engineering and Superision
/86/857.5365
//
Construction Expenses
/108805.5463
/5
Contractors $ee
/3
Contingency
Total Indirect Costs 8I9
///6734./261 5338430.733836/3 !-#!&%).'&#)&$#&
/i;ed Capital Investment 8/CI9" * < I =orkin, Capital 8=C9" #%7 of TCI Total Capital Investment 8TCI9
($"(#("$!+ %#%%((-.&+$)#-!) &'&!-#--.)&#'%)-
Spreadsheet for Estimation of Total Product Cost S. No. *escription 4anufacturin, Costs Direct Production Costs / *aw &aterials 5 perating ;abor 3 perating Superision 2 Power and tilities 1 &aintenance and *epairs 0 perating Supplies 8 ;aboratory Charges 7 Patents @ *oyalties 6 Catalysts and Solents Total Direct Production Costs Fixed Charges /4 >epreciation // #axes /5 !nsurance /3 *ent Total Fixed Charges Plant Overhead Costs /2 Plant erhead Costs Total Plant Overhead Costs Total 4anufacturin, Costs 849 :eneral E;penses /1 Administratie Expenses /0 >istribution @ &ar%eting Expenses /8 *esearch @ >eelopment /7 $inancing '!nterest) Total :eneral E;penses 8:9 Total Product Cost" 4 < :
Cost in Rs.
Cost in Rs.
Cost in Rs.
//514444 /242444 //02444 3/10444 /71761.63 58772.3761 574744 4 128/514 (($&$-&+.&#$% 21/3220.25350478 565/56.0425/836/ 565/56.0425/836/ 4 %+$))+%.!&#!$%!% 750/07.886 -(!#!-.))$ (--!&)+'.)&+#$%! 31/444 3520487.34331148 4 4 &%$)+)-.&+&&%%+) &('!+)-&.+&&%%+)
T>TA6 PR>*?CT C>ST >etermination of the necessary Capital !nestment is only one part of a complete cost estimate. Another equally important part is the estimation of costs for operating the plant and selling the products. #hese costs can be grouped under the general heading of Total Product Cost #he #otal Product Cost is calculated for the %nown production p rocess, which can be produced in the aboe installed plant. #his production process is basically related to the product of Actie Pharmaceutical !ngredient 'AP!) produced from the naturally occuring plants. #he basic *aw &aterial for the process is >uboisia ;eaes. +asis /) #he #otal Product Cost is calculated based on the Annual Cost +asis 5) Number of days wor%ing per year is ta%en as 344 days 3) Plant is running in 3?shifts !.e. 52hrs per day 2) Capacity of the plant per year of the AP!, in :g
5,244
4anufacturin, Costs /) >irect Production Costs a) *aw &aterials S. No. *escription / >uboisia ;eaes
@uantit per annum" B, 64,444
Total Cost of Raw 4aterials
Cost per unit in Rs. /51
Total Annual cost in Rs. //514444 4 4 4 4 4 4 4
##(%++++
b) perating ;abor S. No. *escription / S%illed ;abor 5 ns%illed ;abor 3 9atch men
Total Cost of >peratin, 6a2or
No" Required 34 /4 0
4onthl Salar in Rs. 3444 /144 5444
#'+'+++
Total Annual Salar in Rs. /474444 /74444 /22444 4 4 4 4 4
c) perating Superision S. No. / 5 3 2
*escription !n?charge Superisor ? Plant Superisor ? Stores Superisor ? &aint.
No" Required 3 0 / /
Total Cost of >peratin, Supervision
4onthl Salar in Rs. Total Annual Salar in Rs. /5444 235444 8144 124444 0144 87444 6144 //2444 4 4 4 4 4 4 4 4 4 4
##!'+++
d) Power and tilities S. No. *escription / Steam 5 Electricity 3 9ater
No. of ?nitsear 5,/1,541:g 3,04,444:9 2,354m3
Total Annual Cost of Power and ?tilities
Cost unit 8in Rs.9 0.68 2 14
Total Annual Cost in Rs. /144444 /224444 5/0444
&#%!+++
e) &aintenance and *epairs '&*) Annual cost of maintenance and *epairs is aausmed as 3B of the #otal Equipment Cost
#-%-$%.$&
f) perating Supplies Annual cost of operating supplies is assumed as /1B of the #otal cost of &aintenance and *epairs
()--'.&-
%$ g) ;aboratory Charges Annual cost of laboratory charges is assumed as 54B of the #otal cost of perating ;abor
(-+-++
+
h) Patents and *oyalties Annual cost of patents and royalties !) Catalysts and Solents S. No. / 5 3 2 1 0 8 7 6
*escription ðanol, ;ts >.&.9ater, ;ts ydrochloric Acid, ;ts Chloroform, ;ts Ammonia, ;ts n?+utylbromide, ;ts Acetonitrile, ;ts Actiated Charcoal, :gs yflow, :gs
@uantit per Annum 200,444 /54,444 /,144 87,444 2,444 8,144 8,144 344 0,144
Total Annual Cost of Catalsts and Solvents
Total Annual *irect Production Cost S. No. / 5 3 2 1 0 8 7 6
*escription Total Annual Cost in Rs. *aw &aterials //514444 perating ;abor /242444 perating Superision //02444 Power and tilities 3/10444 &aintenance and *epairs /71761.63 perating Supplies 58772.3761 ;aboratory Charges 574744 Patents @ *oyalties 4 Catalysts and Solents 128/514
Total *irect Production Cost
(($&$-&+.&#
%$Cost per ?nit Total Annual Cost in Rs. 7 3857444 / /54444 2.1 0814 /1 //84444 8 57444 51 /78144 /7 /31444 04 /7444 /5 87444 4 4 4 4 4 4 4 4 %')#(%+
5) $ixed Charges a) >epreciation i) Annual cost of >epreciation for &achinery and Equipment is assumed as /4B of the $ixed Capital !nestment
($(#($!
ii) Annual cost of >epreciation for buildings is ta%en as 3B of the !nitial Cost of buildings
#&#%+(
iii) Annual cost of >epreciation for !nstrumentation @ Controls, piping, Electrical equipment and &aterials is assumed as 1B of $C!
#'!+!'-
($(#&+
($(#&+
+
-(!#!$
b) #axes Annual property taxes for plant is assumed as /B of the $ixed Capital !nestment c) !nsurance Annual cost of !nsurance is assumed as /B of the $ixed Capital !nestment d) *ent Annual cost of *ent for ;and and +uildings Total Annual /i;ed Char,es S. No. / 5 3 2
*escription >epreciation #axes !nsurance *ent
Total /i;ed Char,es
Total Annual cost in Rs. 21/3220.25350478 565/56.0425/836/ 565/56.0425/836/ 4
%+$))+%.!&#!$%!%
3) Plant erhead Costs Annual Plant erhead Costs is assumed as 34B of the total cost of operating labor, superision and maintenance
Total 4anufacturin, Costs 849 S. No. / 5 3
*escription >irect Production Cost $ixed Charges Plant erhead Costs
Total 4anufacturin, Costs
Total Annual cost in Rs. 55636734.3/61 1468841.03/06101 750/07.886 (--!&)+'.)&+#$%!
:eneral E;penses /) Administratie Expenses Annual cost of Administratie expenses is assumed as 51B of the total cost of operating labor
&%#+++
&('!+)-
+
+
5) >istribution and &ar%eting Expenses Annual cost of >istribution @ &ar%eting expenses is assumed as /4B of the #otal Product Cost 3) *esearch and >eelopment Annual cost of *esearch and >eelopment 2) $inancing 'interest) Annual cost of $inancing 'interest) Total :eneral E;penses 8:9 S. No. / 5 3 2
*escription Administratie Expenses >istribution and &ar%eting Expenses *esearch and >eelopment $inancing 'interest)
Total Cost of :eneral E;penses
Total Product Cost 8TPC9" 4 < :
Total Annual cost in Rs. 31/444 3520487.34331148 4 4
&%$)+)-.&+&&%%+)
&('!+)-&.+&&%%+)
Profita2ilit Analsis #o Calculate Profitability Analysis two methods hae been employed. ðod / H +ased on $ixed :nown Selling Price of the $inished Product AP! at 81B Capacity ðod 5 H +ased on Selling Price of the $inished Product AP! calculated at /44B, 81B @ 14B Capacity. 4ethod D # Revenue Through sales At present the mar%et alue of the $inished Product AP! manufactured under this facility per :g Annual *eenue through sales at 81B capacity :ross Profit
Annual Revenue throu,h sales
:ross Profit
%)%&$(#!.$!!'%
Net Profit
:ross Profit ; 8# D ta;79
Assuming tax percent Net Profit
D
54
'!+&#&)&.%)&#!
#otal !nestment D ' Net Profit I >epreciation )
where #otal !nestment $ixed Capital !nestment Pa 1ack Period
+.%)- ears
Rate of Return *ate of *eturn
Rate of Return
' Net Profit D #otal !nestment ) x /44
#%- 7
14,444
$+++++++
Annual >peratin, Cost
Pay Back Period Pay +ac% Period
4ethod D ( Product Unit Cost #he #otal Product Cost estimated in the facility is, *s. #his amount should be compensated by the annual sales of the Product #he nit Cost per :g of the $inished Product AP!
35204873.432 per year
#&%(%.&& per B,
Pay Back Period !n order for the #otal !nestment to hae low leel of ris%, the minimum acceptable return should be Pay +ac% Period
>epreciable $ixed Capital !nestment D ''Aerage profitDyr) I 'Aerage >epreciationDyr))
>epreciable $ixed Capital !nestment
Sum of Sl.Nos. /,3,2,1 @ 0 of Spread Sheet No./
Aerage Profit D ear
Aerage >epreciation D ear
&inimum Acceptable return x $ixed Capital !nestment
'!)'+)&.!!) $C! D Number of years 'N)
where Number of years
Pay +ac% Period
#)"-#)"'+)
/0 B
/4
($(#($!.+'(
(.&'! ears
Selling Price for Different Plant Capacities #o estimate Selling Price '*sD:g) of the $inished Product AP!, aerage net profit is to be determined. A calculation table is prepared to perform this at /44B, 81B @ 14B capacity. Assumptions Ealuation time 'N) is ta%en as #+ ears Salage =alues '=s) are assumed as + Capacity for the /irst and Second year is ta%en as 14B and 81B respectiely.
ContdJJ
Profitability Analysis Contd….
#able / H Calculation #able for /44B Capacity
/ 14
5 81
3 /44
2 /44
1 /44
0 /44
8 /44
7 /44
6 /44
/4 /44
Sum
A. Capacity of the Plant B +. Product *ate, tonsDyear
/.5
/.7
5.2
5.2
5.2
5.2
5.2
5.2
5.2
5.2
55.5
C. All =ariable Costs, '/4)0 *sDyear
/0.53 52.31 35.20/ 35.20/ 35.20/ 35.20/ 35.20/ 35.20/ 35.20/ 35.20/ 344.505
>. All $ixed Costs, 'except >epreciation), '/4)0 *sDyear 'K)
1.4481 1.447 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 14.481/
E. >epreciation, '/4) 0 *sDyear
5.65/3 5.65/ 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3
$. #otal Product Cost 'CI>IE) 52./16 35.58 24.36 24.36 24.36 '/4)0 *sDyear 'K) indicates, consider sum of costs from Sl.No. // to /7 of spreadsheet No.5 All =ariable Costs
24.36
24.36
24.36
24.36
24.36
56.5/3 386.11
Product *ate x nit Cost of $inished Product AP! per :g
>epreciation is calculated as Straight ;ine ðod as follows H d '= ? =s) D N 9here, d annual depreciation, *sDyear = riginal alue of the property at start of the serice life period, completely installed and ready for use, *s or $C! =s Salage alue of property at the end of serice life, *s N Serice life, years
#able 5 H Calculation #able for 81B Capacity
/ 81
5 81
3 81
2 81
1 81
0 81
8 81
7 81
6 81
/4 81
Sum
A. Capacity of the Plant B +. Product *ate, tonsDyear
/.7
/.7
/.7
/.7
/.7
/.7
/.7
/.7
/.7
/.7
/7
C. All =ariable Costs, '/4) 0 *sDyear
52.320 52.31 52.320 52.320 52.320 52.320 52.320 52.320 52.320 52.320 523.210
>. All $ixed Costs, 'except >epreciation), '/4)0 *sDyear 'K)
1.4481 1.447 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 14.481/
E. >epreciation, '/4) 0 *sDyear
5.65/3 5.65/ 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3
56.5/3
$. #otal P roduct C ost ' CI>IE) 35.582 35.58 35.582 35.582 35.582 35.582 35.582 35.582 35.582 35.582 355.822 '/4)0 *sDyear 'K) indicates, consider sum of costs from Sl .No. // to /7 of spreadsheet No.5 All =ariable Costs
Product *ate x nit Cost of $inished Product AP! per :g
>epreciation is calculated as Straight ;ine ðod as follows H d '= ? =s) D N 9here, d annual depreciation, *sDyear = riginal alue of the property at start of the serice life period, completely installed and ready for use, *s or $C! =s Salage alue of property at the end of serice life, *s N Serice life, years
#able 3 H Calculation #able for 14B Capacity
/ 14
5 14
3 14
2 14
1 14
0 14
8 14
7 14
6 14
/4 14
Sum
A. Capacity of the Plant B +. Product *ate, tonsDyear
/.5
/.5
/.5
/.5
/.5
/.5
/.5
/.5
/.5
/.5
/5
/0.53
/0.53
/0.53
/0.53
/0.53
/0.53
/0.53
C. All =ariable Costs, '/4) 0 *sDyear
/0.53 /0.53
>. All $ixed Costs, 'except >epreciation), '/4)0 *sDyear 'K)
1.4481 1.447 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 1.4481 14.481/
E. >epreciation, '/4) 0 *sDyear
5.65/3 5.65/ 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3 5.65/3
/0.53 /05.342
56.5/3
$. #otal P roduct C ost ' CI>IE) 52./16 52./0 52./16 52./16 52./16 52./16 52./16 52./16 52./16 52./16 52/.165 '/4)0 *sDyear 'K) indicates, consider sum of costs from Sl .No. // to /7 of s preadsheet No.5 All =ariable Costs
Product *ate x nit Cost of $inished Product AP! per :g
>epreciation is calculated as Straight ;ine ðod as follows H d '= ? =s) D N 9here, d annual depreciation, *sDyear = riginal alue of the property at start of the serice life period, completely installed and ready for use, *s or $C! =s Salage alue of property at the end of serice life, *s N Serice life, years
Avera,e Net Profit 8N p"ave9 is calculated as Np, ae
'/DN) x Lp x Sum '+) ? Sum '$)M '/ ? taxB)
9here, p is the unit selling price N is the ealuation period tax B is ta%en as 54B Pay +ac% Period $ixed Capital !nestment D 'Aerage Net Profit I Aerage >epreciation) 9here, Pay +ac% Period 5.31 years Aerage >epreciation $C! D /4
565/560
The ?nit Sellin, Price of the /inished Product API at #++7 capacti is Therefore" Avera,e Net Profit per ear
$%&#-)!
(('!&.$#
Avera,e Net Profit 8N p"ave9 is calculated as Np, ae
'/DN) x Lp x Sum '+) ? Sum '$)M '/ ? taxB)
9here, p is the unit selling price N is the ealuation period tax B is ta%en as 54B Pay +ac% Period $ixed Capital !nestment D 'Aerage Net Profit I Aerage >epreciation) 9here, Pay +ac% Period 5.31 years Aerage >epreciation $C! D /4
565/560
The ?nit Sellin, Price of the /inished Product API at #++7 capacti is Therefore" Avera,e Net Profit per ear
$%&#-)!
('%'$.%)
Avera,e Net Profit 8N p"ave9 is calculated as Np, ae
'/DN) x Lp x Sum '+) ? Sum '$)M '/ ? taxB)
9here, p is the unit selling price N is the ealuation period tax B is ta%en as 54B Pay +ac% Period $ixed Capital !nestment D 'Aerage Net Profit I Aerage >epreciation) 9here, Pay +ac% Period 5.31 years Aerage >epreciation $C! D /4
565/560
The ?nit Sellin, Price of the /inished Product API at #++7 capacti is Therefore" Avera,e Net Profit per ear
$%&#-)!
#able ? 2 H &inimum Selling Price for different Plant Capacities Plant Capacity B
&inimum Selling Price '*sD:g)
/44
55203.6/
81
52126.18
14
3440/.8
&++!#.)
