CH2104: Project Costing and Appraisal
Fundamental knowledge of unit operations, chemical reaction engineering and process equipment design principles.
Unit 1: Introduction (7 Hrs)
Introduction to Market Survey, Fundamentals of economics, value, demand, supply, concept of cost, margin, substitution, price determination, returns, profit, factors of production, Minimum economic plant capacity, Break even, Project Evaluation, feasibility.
Unit 2: Cost & Asset Accounting, Cost Estimation (7 Hrs)
Cost & Asset Accounting :Outline of accounting procedure, Basic relationships in accounting: assets, equities & liabilities, The balance sheet, The income statement, Maintaining accounting records: Debits and Credits, The Journal, The Ledger, cost accounting methods: accumulation, inventory, and cost-of-sales accounts, materials costs.
Cost Estimation :Cash flow for industrial operations: Cumulative cash position, etc, Factors Affecting Investment and Production Costs, Capital Investments: Fixed-Capital Investment, Working Capital, Estimation of Capital Investment: Types of Capital Cost Estimates, Cost Indexes, Cost Factors in Capital Investment, Estimation of Total Product Cost: Manufacturing Costs, General Expenses
Unit 3: Project Cost (7 Hrs)
Project Cost: Estimation of various components of project cost as per recommended practice by India Financial Institutes. Elements of project cost, land and site development: Main plant area, outside battery limit facilities, Estimate of land. Building and civil work. Plant & machinery, Contingencies, Pre-operative expenses, Preliminary and capital issue expenses, Working capital, Plant and machinery estimate: Basis of detailed engineering, Equipment cost estimate and other estimates, Order of magnitude estimate.
Cost of production: elements of cost of production, gross cost of production, normative cost of production.
Unit 4: Project Financing, Interest, Investment Costs, Taxes and Insurance (7 Hrs)
Project Financing: Greenfield projects, Add-on projects, ongoing business
Interest & Investment Costs: Types of interest: simple interest, ordinary and exact simple interest, nominal and effective interest rates, compound interest, continuous interest. Loan repayment, Periodic payments, annualized cost, capitalized cost, Present worth and discount, annuities, costs due to interest on investment, borrowed capital versus owned capital, source of capital, income-tax effects, design-engineering practice for interest and investment costs.
Taxes and Insurance: Types of taxes: property taxes, excise taxes, income taxes. Insurance: types of insurance.
Unit 5: Depreciation (7 Hrs)
Depreciation: purpose of depreciation as a cost, types of depreciation, depletion, service value, salvage value, present value, depreciation in chemical project, methods for determining depreciation, appreciation of depreciation concept, depreciation rates, the depreciation schedule.
Unit 6: Profitability Analysis & Project evaluation (7 Hrs)
Profitability, alternative investments, and replacements, Estimate of working results. Project Evaluation: Break even analysis, incremental analysis, ratio analysis, discounted profit flow technique. Feasibility report, Annual report.
After studying this course student will be able to do cost accounting and cost estimation for equipments, He/She can prepare balance sheet and income statement. He/She will be able to depreciation calculations.
CH7014: Process Modeling and Simulation
Knowledge of Programming Language. Basic knowledge of numerical methods, Knowledge of Heat Transfer, Fluid flow operation, Chemical Engineering Thermodynamics, Mass transfer operation and reaction engineering.