Cyclohexane Production Economic Analysis Independent Refineries Inc'

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Cyclohexane Production Economic
AnalysisIndependent Refineries Inc.

• Submitted by
• ChemTech Ltd.
• Cream Team

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Background and Given Information

• IRI requires economic analysis for new
  cyclohexane production process.
• Pro II summary of process provided by IRI
  engineers.
• Depreciation Sinking Fund
• Inflation 3
• Operating Rate 90

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Process Flow Diagram
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Project Goals

• Estimate Total Capital Investment (TCI)
• Estimate Annual Product Cost
• Estimate Annual Cash Flow
• Report of Profitability based on
• Return on Investment
• Net Present Worth

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Total Capital Investment

• Fixed Capital Investment
• Direct Costs
• Purchased Equipment, Installation, Service
• Indirect Costs
• Engineering Supervision and Construction
• Working Capital
• Total Capital Investment 5.5 Million

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Annual Product Cost

• Manufacturing Costs
• Direct Production Costs (Raw Materials)
• Fixed Charges (Depreciation)
• Plant Overhead Costs
• General Expenses
• Administrative Costs, Dist. And Selling Costs, R
  D Costs, and Financing
• Annual Product Cost 67.6 Million

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Annual Cash Flow

• Cash Flow Sales Product Costs Taxes
• These figures are for 2002
• Sales 68.7 Million
• Product Costs 67.6 Million
• Taxes 350,000
• Cash Flow 750,000

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Profitability Report

• Return on Investment
• IRI requires 12
• Average Return on Investment is 14.02
• Net Present Worth
• Present Value Total Capital Investment
• 54,000

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Recommendations

• Profitable according to Return on Investment
• Profitable according to Net Present Worth
• We Recommend the Addition of the Process

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