Advanced Math

You are a process engineer at New Biologics INC. As an engineer, you are asked to determine if the antibiotic process you have designed is economically viable at 20 million kg/yr. The company requires a simple 20% return on investment after taxes, and has an income tax rate of 30%. The process has both solid and fluid processing operations.

The company records indicate that for a similar process in 2000 with an output of 10 million kg/yr the purchased equipment cost was $7 million with a scaling power factor of 0.7. Current cost of raw materials is $0.15/kg, labor is $0.15/kg, and utilities are $0.10/kg.

A. Estimate the total plant cost, indirect plant cost, fixed capital investment, working capital investment and total capital investment

B. Using all available data, estimate the manufacturing cost, and total product cost/kg,

C. Determine the antibiotic selling price for your proposed process assuming a 10-yr. life and straight-line depreciation and a simple 20% return on investment.

D. Determine the breakeven production rate.