Univer siti

Al
Malaysia
PA HA NG
Engineer ing Cr eativIty
FACULTY OF CHEMICAL & NATURAL RESOURCES ENGINEERING
FINAL EXAMINATION
COURSE
:
PROCESS ENGINEERING ECONOMICS
COURSE CODE: BKF4143
LECTURER: MOH]) NOOR BIN NAWI
ANWARUDDIN HISYAM
DATE: 10 JANUARY 2013
DURATION: 3 HOURS
SESSION/SEMESTER : SESSION 2012/2013 SEMESTER I
PROGRAMME CODE : BKB/BKCIBKG
INSTRUCTIONS TO CANDIDATE:
1. This question paper consists of FIVE (5) questions. Answer ALL questions.
2.
All answers to a new question should start on new page.
3.
All the calculations and assumptions must be clearly stated.
4.
Candidates are not allowed to bring any material other than those allowed by
the invigilator into the examination room.
EXAMINATION REOUTREMENTS:
PEE Student's Handbook
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This examination paper consists of ELEVEN (11) printed pages including front page.
CONFIDENTIAL

BKB/BKC/BKG/12131/BKF4143
QUESTION 1
Formalin is a 37 wt% solution of formaldehyde in water. Formaldehyde and urea are
used to make urea-formaldehyde resins that subsequently are used as adhesives and
binders for particle board and plywood.
The Process Flow Diagram, PFD for Unit 800 Formalin production of
58,647 metric
tonnes per annumis shown in Figure B.7.1.
All the major pieces of equipment are
illustrated in Figure B.7.1.
The reactor used is the type of jacketed non-agitated
reactor. Table B.7.1, B.7.2 & B.7.3 provides the information for the Stream, Utility
and Major Equipment Summaries as shown in Figure B.7.1.
The following Table 1 shows bare module costs for all major equipment:
Table 1: List of equipment and its bare module cost, CBM.
Equipment
Bare Module Cost,
CBM
Methanol Preheater, E-801 $210,456
Air Preheater, E-802 $257,890
Reactor Effluent Cooler, E-803 W
Tower Reboiler, E-804 $315,485
Tower Condenser, E-805 $310,782
Product Cooler, E-806 $302,896
Feed Air Compressor, C-801 $205,780
Methanol Feed Pump, P-801(A/B) $60,196 X 2
Tower Reflux Pump, P-802(A/B) $45,560X2
Product Pump, P-803(A/13) X
Formaldehyde Absorber, T-801 $1,850,650
FormaldehydeTower, T-802 Y
Formaldehyde Reactor, R-801 Z
Tower Reflux Drum, V-801 $350,950
a) Estimate the bare module cost,
CBM
for the equipment as per Table 1?
i) Reactor Effluent Cooler, E-803; W
(5 Marks)
ii) Product Pump, P-803(A!B); X
(4 Marks)
iii) Formaldehyde Tower, T-802;Y
(7 Marks)
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BKB/BKC/BKG/121311BKF4143
iv)Formaldehyde Reactor, R-801; Z
(5 Marks)
Given other information as follows:
a. Reactor Effluent Cooler, E-803:-
Floating-head, shell and tube heat exchanger
Area = 28.16 m2
Material of construction = Carbon Steel.
b. Product Pump, P-803(A!B)
Stainless Steel, Centrifugal! Electric Drive
Power0 .5kW
75% efficiency
c. Formaldehyde Tower, 1-802
Material of construction (tower) = Stainless steel
Diameter tower = 2.5m
Height/Length = 19 in
31 SS sieve trays, 70% efficient trays
Max Pressure rating of 200 kPa
d. Formaldehyde Reactor, R-801
Carbon Steel, Floating head Counter flow Exchanger
A=140.44 m2; Q=8,928 MJ/hr; Max Pres. Rating = 350 kPa
b) Estimate the total bare module costs, (CTM) and grass roots costs, (CGR) for the
facility.
(7 Marks)
c) Using Chemical Engineering Plant Cost Index (CEPCI), what would be the CGR
value in year 2011?
(2 Marks)
3
a i m
to Stora ge
Ta nk
P-803A/B
Figure B.7.1 Unit 800: Formalin Process Flow Diagi:im
OTI
C rQ
-t
1
-t
C L
0
0
0
-t
2
C
0
C -80 1P-60 1A/BE-80 1E-80 2 R-80 1T-80 1T-80 2 E-80 3 E-80 4E-80 5V -aol P-80 2 A/B P-50 3 A/BE-80 6
Feed Ai rMetha nolMetha nolAi r Form a ldehyde Form a ldehyde Form a ldehyde Rea ctor TowerTowerTower Tower ProductProduct
C om pressor Feed Pum pPrehea ter Prehea ler Rea ctorAbsorberTowerEffluent Reboi ler C ondenser Rellux Rellux Pum pC ooler
C ooler Drum Pum p
>
I
CONFIDENTIAL
BKB/BKC/BKG/121311BKF4143
Appendix B Information for the Preliminary Design of Eleven Chemical Processes 9 8 5
Table B.7.1 Stream Tables for Unit 8 00
Stream Number 1 2 3 4 5 6
Temp ("C) 25.00 30.00 40.66 40.78 183.01 150.00
Fres kPa 101.325 120.00 101.325 300.00 300.00 265.00
Vappr fraction 1.0 0.0 0.0 0.00 1.0 1.0
Total kg/h 4210.54 2464.75 3120.31 3120.31 145.94 99.92
Total kmol/h 1.45.94 76.92 99.92 99.92 4210.54 3120.31
C omp onent k mol/ h
Methanol 0.0 76.92 94.11 94.11 0.0 94.12
Ox y gen
30.66 0.0 0.0 0.0 30.66 0.0
Formaldehyde 0.0 0.0 0.0 0.0 0.0 0.0
Water 0.0 0.0 5.81 5.81 0.0 0.0
Hydrogen 0.0 0.0 0.0 0.0 0.0 0.0
Nitrogen 115.28 0.0 0.0 0.0 115.28 0.0
Stream Number 7 8 9 10 1 1 12
Temp ("C) 200.00 171.94 200.00 100.00 30.00 84.57
Pres kPa 265.00 255.00 185.00 150.00 150.00 140.00
Vapor fraction 1.0 1.0 1.0 1.0 0.0 1.0
Total kmol/h 145.94 245.86 7330.82 7330.82 2576.15 5354.21
Total kg/h 4210.54 7330.85 278.03 278.03 143.00 224.16
C omp onent k niot/ h
Methanol 0.0 94.12 31.45 31.45 0.0 13.35
Oxygen 30.66 30.66 0.15 0.15 0.0 0.15
Formaldehyde 0.0 0.0 62.67 62.67 0.0 0.04
Water 0.0 5.81 66.82 66.82 1.43.00 93.68
Hydrogen 0.0 0.0 1.66 1.66 0.0 1.66
Nitrogen 115.28 115.28 115.28 115.28 0.0 11.5.28
(continued)
Table B.7.1: Stream Components
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BKB/BKC/BKG/1 21 31/BKF4J 43
A p p e n d i c e s
9 8 6
Table B.7.1 Stre am Table s for Un i t 8 00
( C o n t i n u e d )
Stre am Numbe r
13
14
15
Temp ('Q
89.85
75.46
10664
Pres kPa
150.00
130.00
150.00
Vapor mole fraction
0.0
0.0
0.0
Total kg/h
4552.75
655.56
3897.06
Total kmol/h
196.87
23.00
173.86
Comp on e n t kmot/h
Methanol
18.10
17.19
0.90
Oxygen
0.00
0.00
0.00
Formaldehyde
62.63
0.00
62.63
Water
116.14
5.81
110.33
Hydrogen
0.00
0.00
0.00
Nitrogen
0.00
0.00
0.00
16
17
--
18
106.71
35.00
73.36
350.00
315.00
120.00
0.0
0.0
0.0
3897.06
3897.06
655.56
173.86
173.86
23.00
0.90
0.90
17.19
0.00
0.00
0.00
62.63
62.63
0.00
110.33
110.33
5.81
0.00
0.00
0.00
0.00
0.00
0.00
Table 8 .7.2
Uti li ty Stre am Flow Summary for Un i t 8 00
E -8 01
E -8 02
E -8 03
E -8 04
mps
hps
cw
mps
2063 kg/h
45.43 kg
23,500 kg/h
18,949 kg/h
E -8 05
E -8 06
R -8 01
cw
cw
bfw - mps
775,717 kg/h
27,957 kg/h
3723 kg/h
Table B.7.3 Major E qui p me n t
Summary for Un i t 8 00
Compressor
D-801 A/B (not shown on PFD)
C-801
Electric/exploSIonProof
kW (shaft)
Carbon steel
W 195kW
Centrifugal
Power = 18 3
95% efficient
(continued)
70% efficient
Table B.7.1: Stream Components (Continued), Table B.7.2: UtililyStream and Table
B.7.3: Major Equipment
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BKB/J3KC/BKG/12131/BKF4143
Appendix B Information for the Preliminary Design of Eleven Chemical Processes 9 8 7
Table B.7 .3 Major Equipment Summary for Unit 8 00 (Continued)
Heat Exchangers
E- 8 0 1
A = 405 in'
1-2 exchanger, floating head, carbon steel
Process stream in shell
Q=4111MJ/h
Maximum pressure rating of 350 kPa
E-802
A = 4.62 m2
1-2 exchanger, floating head, carbon steel
Process stream in tubes
Q = 76.75 MJ/h
Maximum pressure rating of 350 kPa
E-803
A = 28.16 m2
1-2 exchanger, floating head, carbon steel
Process stream in shell
Q =
983.23 MJ/h
Maximum pressure rating of 350 kl'a
Reactors
R- 8 0 1, Heat- Exchanger Portion
A = 140.44 m2
Counterfiow exchanger, floating head, carbon
steel
Process stream in tubes
Q =
8,928 MJ/h
Maximum pressure rating of 350 kPa
Pumps
P8 O1 A/B
Centrifugal /electric drive
Carbon steel
Power = 0.3 kW
80% efficient
P- 8 0 2 AJB
Centrifugal/electric drive
Carbon steel
Power = 1.7 kW
80% efficient
E-804
A = 37.3 m2
1-2 exchanger, kettle reboiler, stainless steel
Process stream in shell
Q = 37,755 Mi/h
Maximum pressure rating of 250 kPa
E-805
A = 269 m2
1-2 exchanger, floating head, stainless steel
Process stream in shell
Q
= 32,456 Mj/h
Maximum pressure rating of 250 kPa
E-806
A = 41 m
1-2 exchanger, floating head, stainless steel
Process stream in tubes
Q
= 1169.7 MJ/h
Maximum pressure rating of 400kPa
R-801, Reactor Portion
Thin layers of silver wire gauze suspended
above heat exchanger tube bank
P-803 A/B
Centrifugal /electric drive
Stainless steel
Power = 0.5 kW
75% efficient
(continued)
Table B.7.3 Major Equipment (Continued)
7
CONFIDENTIAL

BKB/BKC/BKC/121311BKF4143
988
Table B.7.3 Major Equipment Summary for Unit 800
( Cont inued)
Towers
T- 801
Carbon steel
10 m of packing
2-in ceramic Bed Saddles
20 theoretical stages
1.00 kPa/m pressure drop
Diameter = 0.86 m
Packing factor = 45
Maximum pressure rating of 300 kPa
Vessel
V-801
Horizontal
Stainless steel
LID = 4.0
Volume = 4.2 m3
T-802
Stainless steel
31 SS sieve trays plus reboiler and partial
condenser
70% efficient trays
Feed on tray 18
Reflux ratio = 37.34
0.6096 m tray spacing, 0.091 in weirs
Column height 19 m
Diameter = 2.5 in
Maximum pressure rating of 200 kl'a
Whim simulating an entire process, we recommend first using the Shortcut:
distillation column within the process for the methanol-Water/formaldehyde dis-
tillation. A rigorous column solver should then be used as a separate item to
simulate the column based on the results obtained from the shortcut column.
However, due to the non-ideality of the thermodynamics, the actual column sim-
TabLe 8.7.4 K-values for Formaldehyde/Water/Methanol System [2]
P(psia) =14.696
T (C)
Chemical Component
Formaldehyde. Water Methanol
0 .1 0.123 1.000 0.273
67.1 0.266 0.491 1.094
72.1 0.336 0.394 1.435
748 0.374 0.453 1.598
84.6 0.546 0.607 2359
97.6 0.693 1.105 2.589
99.9 0.730 1.198 2.595
150.1 1.220 2.460 3.004
Table B.7.3 Major Equipment (Continued)
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CONFIDENTIAL

BKB/BKCIBKG/12131/BKF4143
QUESTION 2
A RM 200,000 process equipment loan at 10% interest, compounded monthly, is
to be repaid in 48 monthly payments.
a) What is the monthly payment and the total amount repaid?
(5 Marks)
b) What monthly deposit would have to be make-up at the end of each month for
48 months in order to accumulate a fund of RM 200,000 on the last deposit
date with which to purchase this equipment?
(5 Marks)
Now, assume an interest rate of 6% compounded monthly is being paid on all
deposits. What is the total of the 48 deposits? Compare your results with those from
Part (a).
(6 Marks)
QUESTION 3
In Hazwani, liMP graduate chemical engineer working in Palm Oil Refinery
Plant is evaluating several alternatives to supply electricity to the plant. Normally,
she will pay RM 5,000,000.00 for electricity purchased from Tenaga Nasional
Berhad (TNB) for the first year and expect an increase of RM 500,000.00
annually.
Alternatively, she plans to build a 5000 kW Power Plant. His operating cost for
the power plant are estimated to be RM 180,000.00 per year. So, she is
considering two alternative fuels:
Alternative I - WOOD
Installation Cost
Fuel Consumption
Fuel Cost
Incremental Cost Rate
No Salvage value
RM1500/ kW
30,000 metric tonnes per year
RM50 per ton
RM5 per ton per year after year one
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BKB/BKC/BKG/12131/BKF4143
Alternative II - OIL
Installation Cost
Fuel Consumption
Fuel Cost
Incremental Cost Rate
No Salvage value
RM1200/kW
56,000 barrels per year
RM55 per barrel
RM3 per barrel per year after year one
If interest rate is 12%, and the analysis period is 10 years, perform equivalent
uniform annual worth (EUAW) analysis on each alternative as the following:
i)Do Nothing (Use TNB supply)
(5 Marks)
ii)Using Wood or
(5 Marks)
iii)Using Oil?
(5 Marks)
Which alternative should be the best choice for Jr. Hazwani?
(3 Marks)
QUESTION 4
a) The Fermenter for Bioprocess Equipment costs RM 355,000.00 and has an
estimated salvage value of RM 35,000.00 at the end of 5 years useful life.
Compute the depreciation schedule for the equipment by;
i) Straight Line Method (SL)
(2 Marks)
ii) Double Declining Balance Method (DDB)
(4 Marks)
iii)Sum of Years Digit Method (SOYD)
(4 Marks)
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BKB/BKC/BKG/121311BKF4143
b) The Company believes the above equipment can give annual receipts of RM
200,000.00 and annual disbursement of RM 120,000.00. Using the same figures as
part (a) with Straight Line Depreciation Method and Corporate Tax Rate of 25%;
i)
What is the prospective internal rate of return (IRR) before income tax?
(5 Marks)
ii)
What is the prospective internal rate of return (IRR) after the taxes?
(5 Marks)
QUESTION 5
The cost of capital is the company's cost of using funds provided by creditors and
shareholders. A company's cost of capital is the cost of its long -term sources of funds:
debt, preferred equity, and common equity!
a) What is the difference between IRR and WACC?
(5 Marks)
b) Briefly outline the Cost of Capital Processing Steps?
(5 Marks)
c) The Plant Design Company will raise capital in the following proportions:
Debt: 40 percent; Preferred stock: 1 Opercent; Common stock: 50 percent.
Calculate the weighted average cost of capital, WACC if its cost of debt is
3.6percent, its cost of preferred stock is 8 percent, and its cost of common
stock is 12 percent?
(6 Marks)
END OF QUESTION PAPER
11