7. (20 pts) Economic analysis or benefit-cost analysis (BCA) of a Material Recovery Facility (MRF) includes...

  
 
 
 
 

Transcribed Image Text:

7. (20 pts) Economic analysis or benefit-cost analysis (BCA) of a Material Recovery Facility (MRF) includes the consideration of the cost of collection from a curbside recycling program, the cost of processing, the avoid landfill cost (i.e., tipping fees) from reducing the amount of waste sent for disposal, and the market value of the recycled materials. After a thorough invesitgation for a typical curbeside recycling program with known composition of recyclables, the collection cost is estimated $123/ton. Estimated total construction cost for a MRF $2,262,700 and its average construction cost $22,627 S/ton/day (S/TPD) with a throughput capacity of 100 TPD. Estimated capital cost also includes equipment cost for a throughout capacity of 100 TPD which is comprised of sorting systems (vonveyors, trommel screens, and magnets) and processing systems (balers, HDPE granulators, and glass crishers). The total equipment cost is $3,231.467 and its average cost is $32,315 S/TPD. Total çapital cost is equal to the summation of total construction cost, total equipment cost, and additional engineering cost, which is $2.262,700, $3,231,467, and $549,400, respectively, and the lump sum of capital cost is $6,043,600. Thus, the average capital cost for construction is $60,436 S/TPD. Total operating cost with a throughput capacity of 100 TPD inlcudes labor cost and operation and maintenance (O&M) cost. It is known that unit labor cost is $21.46 $/TPD and unit O&M cost is $29.03 $/TPD based on a national survey. Unit operating cost is $50.49 S/TPD. However, tax and depreciation have not been included for this BCA assessment. Avoided disposal cost is $22 per ton. Assume that the operating cost remains the same over the facility life The estimates of recycling rates and revenues for 100 tons of recovered materials is shown in Table 3 below based on recycling market. Note that with only 3% of mass aluminum provides 37% of revenue. Assume that the recycling revenue remains the same over the facility life. Debt service based on an interest rate of 10% and amortized over 20 years for facility and 7:16 PM Debt service based on an interest rate of 10% and amortized over 20 years for facility and equipment can be used for calculation of the uniform cash flow of amortized capital cost via the annual equivalent model below: A =P[₁=(1+0) ³ where is interest rate per interest period, is number of interest period, P is sum of money at a time denoted as present, and 4 is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor Thus, the average net cost ($/ton) as present value is average net cost (S/ton) unit capital cost + unit collection cost (S/ton) + unit operating cost (5/ton) income (S/ton)- avoided cost (S/ton) Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials Materials % of Revenue Revenue (S) (552 Newspaper16 6 Mass (ton) 23 Price (5/ton) 24 where i is interest rate per interest period, n is number of interest period, P is sum of money at a time denoted as present, and 4 is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor. Thus, the average net cost (S/ton) as present value is: average net cost (S/ton) - unit capital cost + unit collection cost (S/ton) + unit operating cost (S/ton)-income (S/ton)-avoided cost (S/ton) Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials % of Revenue Materials Price (S/ton) 24 Revenue (S) 552 6 70 3,360 38 Newspaper #16 Corrugated Mass (ton) 23 48 cardboard High grade paper Steel cans. Aluminum cans Clear PETE Green PETE 1 Natural HDPE 1 Glass 10 Total 8 5 3 1 100 73 56 1080 100 100 320 25 1,848 584 280 3240 100 100 320 250 8,786 7 3 37 1 1 4 3 100 1) What is the average net cost of running the MRF decribed in above? 2) What is the benefit/cost ratio? Is the MRF project economically viable? 7. (20 pts) Economic analysis or benefit-cost analysis (BCA) of a Material Recovery Facility (MRF) includes the consideration of the cost of collection from a curbside recycling program, the cost of processing, the avoid landfill cost (i.e., tipping fees) from reducing the amount of waste sent for disposal, and the market value of the recycled materials. After a thorough invesitgation for a typical curbeside recycling program with known composition of recyclables, the collection cost is estimated $123/ton. Estimated total construction cost for a MRF $2,262,700 and its average construction cost $22,627 S/ton/day (S/TPD) with a throughput capacity of 100 TPD. Estimated capital cost also includes equipment cost for a throughout capacity of 100 TPD which is comprised of sorting systems (vonveyors, trommel screens, and magnets) and processing systems (balers, HDPE granulators, and glass crishers). The total equipment cost is $3,231.467 and its average cost is $32,315 S/TPD. Total çapital cost is equal to the summation of total construction cost, total equipment cost, and additional engineering cost, which is $2.262,700, $3,231,467, and $549,400, respectively, and the lump sum of capital cost is $6,043,600. Thus, the average capital cost for construction is $60,436 S/TPD. Total operating cost with a throughput capacity of 100 TPD inlcudes labor cost and operation and maintenance (O&M) cost. It is known that unit labor cost is $21.46 $/TPD and unit O&M cost is $29.03 $/TPD based on a national survey. Unit operating cost is $50.49 S/TPD. However, tax and depreciation have not been included for this BCA assessment. Avoided disposal cost is $22 per ton. Assume that the operating cost remains the same over the facility life The estimates of recycling rates and revenues for 100 tons of recovered materials is shown in Table 3 below based on recycling market. Note that with only 3% of mass aluminum provides 37% of revenue. Assume that the recycling revenue remains the same over the facility life. Debt service based on an interest rate of 10% and amortized over 20 years for facility and 7:16 PM Debt service based on an interest rate of 10% and amortized over 20 years for facility and equipment can be used for calculation of the uniform cash flow of amortized capital cost via the annual equivalent model below: A =P[₁=(1+0) ³ where is interest rate per interest period, is number of interest period, P is sum of money at a time denoted as present, and 4 is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor Thus, the average net cost ($/ton) as present value is average net cost (S/ton) unit capital cost + unit collection cost (S/ton) + unit operating cost (5/ton) income (S/ton)- avoided cost (S/ton) Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials Materials % of Revenue Revenue (S) (552 Newspaper16 6 Mass (ton) 23 Price (5/ton) 24 where i is interest rate per interest period, n is number of interest period, P is sum of money at a time denoted as present, and 4 is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor. Thus, the average net cost (S/ton) as present value is: average net cost (S/ton) - unit capital cost + unit collection cost (S/ton) + unit operating cost (S/ton)-income (S/ton)-avoided cost (S/ton) Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials % of Revenue Materials Price (S/ton) 24 Revenue (S) 552 6 70 3,360 38 Newspaper #16 Corrugated Mass (ton) 23 48 cardboard High grade paper Steel cans. Aluminum cans Clear PETE Green PETE 1 Natural HDPE 1 Glass 10 Total 8 5 3 1 100 73 56 1080 100 100 320 25 1,848 584 280 3240 100 100 320 250 8,786 7 3 37 1 1 4 3 100 1) What is the average net cost of running the MRF decribed in above? 2) What is the benefit/cost ratio? Is the MRF project economically viable?

Answer rating: 100% (QA)

The benefitcost ratio BCR is a ratio used in a costbenefit analysis to summarize the overall relationship between the relative costs and benefits of a proposed project BCR can be expressed in monetary ... View the full answer