A process plant is to be designed to make 65 kg/d of a chemical product selling at $200/kg. The operating time will be 300 day/year. Investments: Fixed capital investment is estimated to be $6106 which is 75% of the total capital investment. Expenses: The annual production cost (not including depreciation) is estimated to be $1.2106 /year. For depreciation charges, the straight line method can be used over ten years as expected life of the plant. Tax, MARR, and interest rates: Tax rate is 30% per year. Based on the company policies, a minimum acceptable return of 30 percent per year (after taxes) is used as MARR for this economic evaluation. For time-value-of-money calculations, use discrete interest compounding and discrete cash flows relationships. The discretely compounded earning (discount) rate (i) is 30% per year. Cash flow can be assumed to be received in one discrete amount at the end of each year for 10 years.

Other items: Salvage values and land value can be ignored. Recovery of the working capital occurs at the end of the year 10.

a) Payback period (PBP) and compare it with the reference value for PBP (called PBPmar)

b) Net present worth