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Course Code : ACH1125/ 2009 R-2009 Reg.

No :


Madhurawada, Visakhapatnam
Affiliated to JNT University K, Kakinada
B.Tech. VI-Semester Regular & Supplementary Examinations, May/ June 2014
Chemical Plant Design & Economics
(Chemical Engineering)

Date : 29-05-2014 Time : 3 Hours Max. Marks : 60

1. Question No. 1 is Compulsory.
2. Answer any FOUR from questions 2 to 8.
3. All parts of a Question must be answered in one place to get valued.

1. Answer the following questions in 4 or 5 sentences: 2x8=

16 Marks
a) Is working capital a depreciable asset?
b) Explain the Langs method.
c) Explain direct and indirect costs.
d) What are fixed charges? What are the various components of fixed charges?
e) If the nominal annual interest rate is 6%, find the value of Rs. 1000 deposit after 10 years
semi annual compounding.
f) What are the various types of insurance for process plants?
g) What is meant by a discounted cash flow? Explain.
h) Explain the significance of incremental cost in design considerations.

2. Explain the different types of design estimates. 11 Marks

3. Enumerate the stages that are involved in the evolution of a process. 11 Marks

4. What are the different types of cost indices available for process plants cost estimates. 11 Marks

5. An equipment having initial investment of Rs. 2,00,000, salvage value for a service life of ten
years is Rs. 20,000. Calculate the book value, annual depreciation, total depreciation at the end
of each year by
(i) straight line method 3 Marks
(ii) declining balance method 4 Marks
(iii) sinking fund method at 5% interest rate. 4 Marks

6. A project is expected to have cash flow for 5 years as follows after all the expenses and taxes.
The initial fixed capital investment (Cf) is Rs. 10 lakhs and the working capital is taken as 15%
of Cf.
Year Cash flow
1 2,00,000
2 2,70,000
3 3,30,000
4 4,00,000
5 4,75,000

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Course Code : ACH1125/ 2009 R-2009 Reg. No :

(i) Find the rate of return on the original investment using straight line depreciation. 4 Marks
(ii) Calculate average profit. 4 Marks
(iii) Calculate pay out time without interest charge. 3 Marks

7. Explain the general procedure to determine optimum conditions. Enumerate the design aspects in 11 Marks
determining optimum reflux ratio.

8. a) A person requires Rs. 20,000 at the beginning of each year from 2005-2009. How much 6 Marks
should be the deposit at the end of each year from 1995 to 2000. Interest rate is 12%.
b) A heat exchanger has been purchased for $2400 with a performance guaranteed to save 5 Marks
6,00,000 Btu/hr. Actual service tests after installation show the exchanger will give only 95%
of the guaranteed rate. If heat energy is worth $0.4/ 106 Btu, what is the penalty by which the
manufacturer should reduce the price based on 6 years service with money worth 8%, assuming
6000 hr/yr operations.

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