BREAK-EVEN ANALYSIS

This term can be defined of the analysis of income, cost and profit structures with particular
reference to the break-even point, to show the effect on break even point of charges in
income and costs. The break-even analysis will require an estimation of fixed costs, variable
cost and total revenues.

[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

TOTAL COST

Total cost is also known as operating costs, according to Coulson and Richardsons (2001).
Total cost can divide into two groups :

Fixed Capital

Fixed capital is the total cost of the plant ready for start-up. It is cost paid to the contractors.
It includes the cost for :

Design and other engineering and construction supervision

All item of equipment and their installation
All piping, instrument and control systems
Buildings and structures
Auxiliary facilities, such as utilities, land and civil engineering work
It is once only cost that is not recovered at the end of the project life, other than the scarp
value.

[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

Working Capital
Working capital is the additional investment needed, over and above the fixed capital, to
start up the plant and operate it to the point when income is earned. It includes the cost of :
Start-up
Raw material and intermediates in the process
Finished product inventories
Funds to cover outstanding account from customers
[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

Fixed Cost
Fixed costs are the costs that do not vary with production rate. These are the bills that have
to be paid whatever the quantity produced. It includes as follows :
 Maintenance (labour and material)
Operating labour
Laboratory cost
Supervision
Plant overheads
Capital charges
Rates (and any other local taxes)
Insurance
License fees and royalty payments
Fixed cost (FC) = QT x f
Where : QT = Total plant capacity per year
f = fixed cost per tonne

[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

Variable Cost (VC)

Variable costs are the costs that are dependent on the amount of product produced. It
includes as follows :
Raw materials
Miscellaneous operating materials
Utilities (services)
Shipping and packaging
Variable cost (VC) = V x Q
Where : v = variable cost per tonne
Q = capacity
Total cost can be calculated by using the following equation :
TC = FC + VC
Where : FC = Fixed Cost
VC = Variable Cost
[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]
Total Revenue
Total revenue is the total amount of money generated from the sale of output. It can be
calculated by using the following equation :
TR = P x Q
P = Price per unit Lithium Carbonate
Q = Quantity (tonnes)
[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

BREAK-EVEN POINT
The objective of the break-even analysis is to determine the quantity at which the product, at
an assumed price, will generate enough revenue to start earning a profit. Break-even point is
to estimate the volume or capacity for the company to reach the total cost equal to the total
revenue and no profit was earned yet. So, it can be defined as :
Total Revenue = Total Cost
TR = TC
Then, at some value of variable the revenue and the total cost relations will intersect to
identify the break-even point, QBE. If Q > QBE, there is a predictable profit. But if Q < QBE,
there is a loss. Profit is defined as :
Profit = Total revenue - Total cost
= TR - TC
Break-even point can be calculated using the equation below:
BEP = FC /(P-VC)
Breakeven Point = Fixed Costs / (Unit Selling Price - Variable Costs)
This calculation will let you know how many units of a product youll need to sell to break
even. Once youve reached that point, youve recovered all costs associated with producing
your product (both variable and fixed). Above the breakeven point, every additional unit sold
increases profit by the amount of the unit contribution margin, which is defined as the
amount each unit contributes to covering fixed costs and increasing profits. As an equation,
this is defined as:
Unit Contribution Margin = Sales Price - Variable Costs

[Sources : Daniel Richard, How to Do Break-even Analysis]

In its simplest form, the break-even chart is a graphical representation of costs at various
levels of activity shown on the same chart as the variation of income (or sales, revenue) with
the same variation in activity. The point at which neither profit nor loss is made as the
break-even point and is represented on the chart below by the intersection of two lines :
In the diagram above, the line OA represents the variation of income at varying levels of
production activity (output). OB represents the total fixed costs in the business. As output
increases, variable costs are incurred, meaning that total costs (fixed + variable) also
increases. At low levels of output, costs are greater than income. At the point of intersection,
P will cost exact equal to income and hence neither profit nor loss is made.

[Sources :http://tutor2u.net/business/production/break_even.htm]
ESTIMATION OF PURCHASED EQUIPMENT COSTS

To obtain an estimate of the capital cost of a chemical plant, the costs associated with major
plant equipment must be known. The most accurate estimate of the purchased cost of a
piece of major equipment is provided by a current price quote from a suitable seller of
equipment. The next best alternative is to use cost data on previously purchased equipment
of the same type. Another technique, sufficiently accurate for study and preliminary cost
estimates, utilizes summary graphs available for various types of common equipment. Any
cost data must be adjusted for any difference in unit capacity and also for any elapsed time
since the cost data were generated.

[Sources : Analysis, Synthesis and Design of Chemical Processes,4th ed by Richard Turton]

Effect of Capacity on Purchased Equipment Cost

The most common simple relationship between the purchased cost and an attribute of the
equipment related to units of capacity is given by :

= ( )

Where

A = Equipment cost attribute (eg: capacity, volume, area)

C = Purchased Cost

n = Cost Exponent

Subscripts a = equipment with the required attribute

Subscripts b = equipment with base attribute

[Sources : Analysis, Synthesis and Design of Chemical Processes,4th ed by Richard Turton]

Effect of Time on Purchased Cost

When one depends on past records or published correlations for price information, it is
essential to be able to update these costs to take changing economic conditions (inflation)
into account. This can be achieved by using the following expression :
 2
2 = 1 ( )
1

Where

C = Purchased Cost

I = Cost Index

Subscripts 1 = base time when cost is known

Subscripts 2 = time when cost is desired

[Sources : Analysis, Synthesis and Design of Chemical Processes,4th ed by Richard Turton]

ESTIMATION OF EQUIPMENT COST

Bare Module Cost For Reactor

1. To find Cp, find K1, K2 and K3 at Table A.1 at Mixer/Settler at Reactor.

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
Reactors Mixer/Settler 4.7116 0.4479 0.0004 Volume, 0.04 60
m3
*Assume the volume of all reactors are same at 45 m3
log10 = 1 + 2 log10 + (3 log10 )2

log10 = 4.7116 + 0.4479(log10 45) + 0.0004(log10 45)2

= $283,922.62

2(2016)
(2016) = 1(2001)
1(2001)

For index cost CEPPCI at Jan 2016 = 536.4,

536.4
= $283,922.62 ( )
397

= $ 381,829.44
 2. From Table A.5, the equation for bare module cost for compressor is:

2. From Table A.6 and Figure A.19, find :

Equipment Type Equipment Description Bare Module Factor, FBM

Reactors Mixer/Settler 4.0

= = 381,829.44 (4.0)

= 1,527,317.75

= , , .
= , ,

Bare Module Cost For Pump (P-101)

1. To find Cp, find K1, K2 and K3 at Table A.1 at Centrifugal at Pump:

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
Pump Centrifugal 3.3892 0.0536 0.1538 Shaft 1 300
Power,
kW
*Power at pump 101 (P-101) = 10.6 kW

log10 = 1 + 2 log10 + (3 log10 )2

log10 = 3.3892 + 0.0536(log10 10.6) + 0.1538(log10 10.6)2

= $ 4,034.96

2(2016)
(2016) = 1(2001)
1(2001)

For index cost CEPPCI at Jan 2016 = 536.4,

 536.4
= $4,034.96 ( )
397

= $ 5,451.77

2. Find B1 and B2 at table A.4 under centrifugal pump.

1 = 1.89 2 = 1.35

3. Find FP using equation A.3 and table A.2

Equipment Equipment Pressure Range

C1 C2 C3
Type Description (barg)
Pump Centrifugal 0 0 0 < 10

log = 1 + 2 log() + 3 [log ]2

Pressure, P = 6 barg
log = 0 + 0 log(6) 0[log 6]2
= 1

4. Find FM using Figure A.18 and Table A.3

Identification Equipment Equipment Material

Number Type Description Construction

38 Pumps Centrifugal Carbon Steel

= 1.6

= = (1 + 2 )

= $ 4,034.96(1.89 + 1.35(1.6)(1))

= $ 16,341.59

Summary table for calculation of CBM of pump :

Equipment CBM (USD)
P-101 16,341.59
P-102 22,558.00
P-103 140,149.00
P-104 25,362.00
P-105 19,962.00
P-106 13,186.00
P-107 16,041.00
TOTAL 253,599.59

Bare Module Cost For Dryer

3. To find Cp, find K1, K2 and K3 at Table A.1 at Mixer/Settler at Reactor.

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
2
Dryer Rotary 3.5645 1.1118 -0.0777 Area, m 5 100
*Assume the volume of all reactors are same at 30 m2
log10 = 1 + 2 log10 + (3 log10 )2

log10 = 3.5645 + 1.1118(log10 30) 0.0777(log10 30)2

= $108,950.89

2(2016)
(2016) = 1(2001)
1(2001)

For index cost CEPPCI at Jan 2016 = 536.4,

536.4
= $108,950.89 ( )
397

= $ 147,207.20

2. From Table A.5, the equation for bare module cost for compressor is:

=
 4. From Table A.6 and Figure A.19, find :

Equipment Type Equipment Description Bare Module Factor, FBM

Dryer Rotary 1.25

= = 147,207.20 (1.25)

= 184,008.99

= , .
= , .

Bare Module Cost For Granulator

Bare module cost for granulator is assume to be USD 73,826.80 from the current market
price.

(Sources : http://www.karishmapharmamachines.com/dry-granulator.html#dry-granulator)

Bare Module Cost For Heat Exchanger

1. To find Cp, find K1, K2 and K3 at Table A.1 at floating head at Heat Exchanger.

Equipment Equipment Capacity, Min Max

K1 K2 K3
Type Description Units Size Size
Heat Floating
4.8306 -0.8509 0.3187 Area, m2 10 1000
Exchanger head

log = 1 + 2 log() + 3 [log ]2

log = 4.8306 + 0.8509 log(500) + 0.3187 [log 500]2

= $71,712.88

2. Find B1 and B2 at table A.4 under floating head heat exchangers

 1 = 1.63 2 = 1.66

3. Find FP using equation A.3 and table A.2

Equipment Equipment Pressure Range

C1 C2 C3
Type Description (barg)
Heat Fixed Tube
0 0 0 <5
Exchangers Sheet

log = 1 + 2 log() + 3 [log ]2

Pressure, P = 3 barg

log = 0 + 0 log(3) 0[log 3]2

= 1

4. Find FM using Figure A.18 and Table A.3

Identification Equipment Equipment Material

Number Type Description Construction
4 Heat Floating CS-shell /
Exchanger Head CS-tube

Based on table A.18 FM= 1.8

5. Find CBM

= [1 + 2 ]

= $71712.88[1.63 + (1.66)(1)(1)]

(2001) = $235,935.38
 2016 536.4
(2016) = 2001 = $235,935.38
2001 397

(2015) = $318780.20

Summary table for calculation of CBM of heat exchanger :

Equipment Pressure (barg) CBM (USD)

H-101 1 318,780.20

H-102 5 318,780.20

H-103 1 318,780.20

H-104 5 318,780.20

H-105 1 318,780.20

H-106 5 318,780.20

H-107 1 318,780.20

H-108 11 322,479.58

TOTAL 2,553,941.00

Bare Module Cost For Filter

1. To find Cp, find K1, K2 and K3 at Table A.1 at disc & drum at filter.

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
Dryer Rotary 4.8123 0.2858 0.0420 Area, m2 5 100
*Assume the volume of all reactors are same at 150 m2
log10 = 1 + 2 log10 + (3 log10 )2

log10 = 4.8123 + 0.2858(log10 150) 0.0420(log10 150)2

= $429,647.80

2. From Table A.5, the equation for bare module cost for filter is:

From Table A.6 and Figure A.19, find :

Equipment Type Equipment Description Bare Module Factor, FBM

Filter Disc and Drum 1.65

= = $429,647.80 (1.65)
= $708,918.80
536.4
(2016) = 2001 2016 = $708,918.80 397
2001

= $957,843.90

= $, .
= $, , .

Bare Module Cost For Mixer

1. To find Cp, find K1, K2 and K3 at Table A.1 at disc & drum at filter.

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
Mixer Propeller 4.3207 0.0359 0.1346 Power, 5 500
kW
*Assume the power of all reactors are same at 250 kW
log10 = 1 + 2 log10 + (3 log10 )2
 log10 = 4.3207 + 0.0359(log10 250) + 0.1346(log10 250)2

= $151,618.30

2. From Table A.5, the equation for bare module cost for mixer is:

From Table A.6 and Figure A.19, find :

Equipment Type Equipment Description Bare Module Factor, FBM

Mixer Propeller 1.38

= = $151,618.30 (1.38)
= $209,233.30
2016 536.4
(2016) = 2001 = $209,233.30
2001 397
= $282,702.10

= $, .
= $565,404.20

Bare Module Cost For Separator

1. To find Cp, find K1, K2 and K3 at Table A.1 at centrifugal at separator.

Equipment Equipment K1 K2 K3 Capacity, Min Max

Type Description Units Size Size
Separator Centrifugal 4.3612 0.8764 -0.0049 Diameter, 0.5 1
Separator m
*Assume the diameter of all separators are same at 1 m
log10 = 1 + 2 log10 + (3 log10 )2

log10 = 4.3612 + 0.8764(log10 1) + 0.0049(log10 1)2

= $22,972.10
2. From Table A.5, the equation for bare module cost for separator is:

From Table A.6 and Figure A.19, find :

Equipment Type Equipment Description Bare Module Factor, FBM

Separator Centrifugal Separator 1.57

= = $22,972.10 x 1.57
= $36,066.10
2016 536.4
(2016) = 2001 = $36,066.10
2001 397
= $48,730.10

= $, .
= $97,460.20

Summary Table for Total Equipment Cost

EQUIPMENT (2016)

Reactor 6,109,271.00

Pump 253,599.60

Dryer 368,018.00

Heat Exchanger 2,553,941.00

Filter 3,831,375.60
 Mixer 565,404.20

Separator 97,460.20

Granulator 73,826.80

Total 13,852,895.80

ESTIMATING TOTAL CAPITAL COST OF A PLANT

The capital cost for a chemical plant must take into consideration many costs other than the
purchased cost of equipment. The Chemical Engineering Plant Cost Index (CEPCI) can be
used to account for changes the result from inflation. In most situation, cost information will
not be available for the same process configuration thus other estimating techniques can be
used like the Lang Factor technique.

Lang Factor Technique

In industrial engineering, the Lang factor is a ratio of the total cost of installing a process in a
plant to the cost of its major technical components. The factors were introduced by H.J. Lang
in Chemical Engineering magazine in 1947 as a method of estimating the total installation
cost for plants and equipment.

These factors are widely used in the refining and petrochemical industries to help
estimate the cost of new facilities. A typical multiplier for a few unit within a refinery would be
in the range of 5.0. This means if you add up the purchase price of all the pumps, heat
exchangers, pressure vessels and other process equipment then multiply that cost by 5, will
obtain a rough estimate of the total installed cost of the plant, including equipment, materials,
construction and engineering. The accuracy of this estimate method usually is +/- 30%. The
factors change over time because construction labor, bulk materials (concrete,pipe),
engineering design, indirect costs and major process equipment prices often do not change
at the same rate.

Factorial Estimates
To make more accurate estimate, the cost factors that are compounded into Lang Factor
are considered individually. The direct-cost items that are incurred in the construction of a
plant :

Equipment erection, including foundations and minor structural work

Piping, including insulation and painting
Electrical, power and lighting
Instruments, local and control room
Process buildings and structures
Ancillary buildings, offices, laboratory buildings, workshops
Storage, raw materials and finished product
Utilities (services)
Site and site preparation

The contribution of each of these items to the total cost is calculated by multiplying the total
purchased equipment by an appropriate factor. The indirect costs are ;
Design and engineering costs, which cover the cost of design and the cost of
engineering the plant : purchasing, procurement and construction supervision.
Typically 20% to 30% of direct capital cost.
Contractors fee, if a contractor is employed his fees(profits) would be added to the
capital cost and would range from 5% to 10% of the direct costs.
Contingency allowance, this is an allowance built into the capital cost estimate to
cover for unforeseen circumstances (labor disputes, design errors, adverse weather).
Typically 5 to 10% of the direct costs.

[Sources : Chemical Engineering Design, Fourth Edition by R.K. Sinnott]

FIXED CAPITAL COST

Besides only focusing on the price of raw materials, a large sum of investment to establish a
fully operational plant must be made. Fixed capital investment is simply the sum of money
that required to be invested at the early stage of the construction of a fully operating plant.
Purchasing of equipment that is needed and the installation is crucial part as it will be the
core investment that will determine the compatibility of the plant as well as piping installation,
land, instrumentation, services and the land where the plant is going to be established.
Table : Fixed Capital Investment of the Lithium Carbonate Plant

Component Estimation Cost (USD)

Direct Cost

Total Equipments Costs 13,852,895.80

Equipment Installation

(includes insulation and 40% of total equipment cost 5,541,158.56

painting)

Piping System Installation

50% of total equipment cost 6,926,447.90
Instrumentation and Control
20% of total equipment cost 2,770,579.20
Electrical System
15% of total equipment cost 2,079,434.40
Installation
50% of total equipment cost 6,926,447.90
Service facilities

Building, process and

40% of total equipment cost 5,541,158.30
auxiliary
(498.00/ m3) 29,880,000.00
Land (for 6 hectar)
12% of total equipment cost 1,662,347.50
Yard Improvement
75,180,469.60
Total

Indirect Costs
10% of total direct cost 7,518,046.90
Engineering and supervision 7,518,046.90
10% of total direct cost
Legal expenses 3,759,023.50
5% of total direct cost 9,021,656.40
Contractors fee
27816773.70
12% of total direct cost
Contingencies

Total

Fixed Capital Investment Direct Costs + Indirect 102,997,243.30

Costs
OPERATING CAPITAL COST

Operating capital represents costs (variable cost plus fixes capital cost) necessary to
operate the plant. Listed below show the components of the working capital that need to be
taken account :

Raw materials
Labor Cost
Utilities
Waste Treatment

Annual Cost of Raw Materials

Table : Annual cost for raw material
Raw Material Cost of Raw Materials Raw material usage Annual Cost for raw
(USD/tonnes) (tonnes/year) material (USD/year)
Brine 43.89 1,337,134.118 58,686,816.44
Soda Ash 230.00 3,822.895 879,265.85
HCL 1261.01 56,869.52 71,713,033.42
Calcium Hydroxide 1154.80 5,778.274 6,672,746.20

TOTAL 1554.70 1,403,604.81 197,951,861.90

Estimation of Operating Labor Cost

The technique used to determine the operating labor cost is by using Alkayat and Gerrard
method. According to this method, the operating labor requirement for chemical processing
plant is given by equation below:

NOL : Number of operator shifts

P : Number of processing steps involving particulates solids

Nnp : Number of non-particulate processing steps

Equipment That Needs An Operator To Operate

Table : Equipment that needs and operator to operate

Type of Equipment Number of Equipment Nnp
Reactor 4 4
Mixer 2 -
Separator 2 -
Filter 4 -
Dryer 2 -
Granulator 1 -
Pump 8 -
Heat Exchanger 8 8
TOTAL NNP 12

= 3.008 ( )

Number of Operator Needed for One Equipment

Assumption:

i. A chemical plant normally operates 24 hours per day. This requires:

3 340 = 1020

ii. A single operator works on average 48 weeks a year. This is due to 3 weeks time off for
vacation and sick leave. Hence.

1 5 48 = 240

iii. Number of operator needed:

1
1020 = 4.25
240

From the assumption, the total number of operator needed for all equipments are:

Number of operator needed x NOL

4.25 operators X 3.008 = 12.78 operators 13 operators

Table :Total Operating Labor Cost

Salary Annual salary

Position Quantity (USD/month) (USD/year)

Engineering Department

(i) Senior Engineer 1 5,500.00 66,000.00

(ii)Engineer 3 2,190.00 26,280.00

(iii) Process Operator 13 1800.00 280,800.00

Technical Department

(i) Senior Technician 1 2,000.00 24,000.00

(ii) Service Supervisor 1 1,800.00 21,600.00

(iii) Technician 3 1,500.00 54,000.00

Non-Shift Worker

(i) Safety Officer 1 5,500.00 66,000.00

Administration Team

(i) Human Resource Manager 1 4,000.00 48,000.00

(ii) Human Resource assistant 3 1,900.00 68,400.00

Sales

(i) Sales Manager 1 4,500.00 54,000.00

(ii) Sales Assistant Manager 2 2,000.00 24,000.00

 Total 32,690.00 733,080.00

Estimation of Utilities Cost

Utilities cost includes electricity and water that used in the plant as well as the management
cost for the treatment of waste. This term includes power, steam, cooling and process water
and the effluent treatment, unless costed separately. The quantities that are been stated
above can be obtained from the energy balance. The total utilities is come from the total
energy that are calculated for each equipment that are required utility to be supplied in order
for them to operate. The price should be taken from the primary sources and the plant
location. The current cost of utilities supplied by the utility companies such as electricity and
water can be obtained from the local authority.

Table : Estimation of Utilities Cost and Cost of waste treatment

Utilities Value Unit

Water Price :
a) Industrial USD 0.42 /m3
Amount of water needed for the first start up 103 m3/day
Total water cost per year USD 14,275.80
Electricity Price :
b) (High Voltage A Option 1 off peak load) USD 0.04 kW/h
Total power required 8,929.45 kW
Total Electricity cost per day USD 357.17/day
Total electricity cost per year USD
121,440.52/year
Waste Water Treatment USD 4,969 /year
TOTAL UTILITIES COST USD 140,685.32

Total Variable Cost = Raw Material + Labor Cost + Utilities

= USD 197,951,861.90 + USD 733,080.00 + USD 140,685.32

= USD 198,825,627.20
Operating Cost = Fixed Capital Cost + Variable Cost

= USD 102,997,243.30 + USD 198,825,627.20

= USD 252,274,568.00

Start-up Costs

Start-up costs is defined as costs allocated for starting up the plant operation. Process
modifications, start-up labor and loss in production are some of the examples of start-up
costs.

Douglas also estimated the total start-up cost of the plant operation is to be 10% of the

fixed capital investment (III).

Start-up Costs = 0.10 x fixed capital investment

= 0.10 x 102,997,243.30

= $10,299,724.30

Total Investment

As stated earlier, total capital investment is the sum of the fixed capital

investment and the working capital plus the start-up costs.

Total capital investment = Fixed capital investment + Operating capital investment

+ Start-up costs

= $ 102,997,243.30 + $198,825,627.20 + $10,299,724.30

= $ 257,609,462.10

Total Revenue

Product credit

Table : Total annual sales

Product Product price ($) Product amount Price/year ($/yr)

(ton/year)

Lithium carbonate 10,962.10 26,000 285,014,600.00

Break Even Analysis

Breakeven analysis is performed to determine the value of variable or parameter of a project

that makes two elements equal, for example the sales volumes that equates revenue and
costs.

Therefore,

Selling Price = Product

= USD 285,014,600.00/year

Break Even Point = Fixed Capital Cost / (Revenue - Variable Cost)

= 102,997,243.30/ (285,014,600 - 198,825,627.20)

= USD 1.195/year x 1000 tonne/yr

= 1195 metric tonne/year

Cash Flow Analysis

Cash flow ROROI payback period

Table 1 20:Cash flow ROROI payback period

Cost of land $29,880,000.00

FCI $102,997,243.30
FCI1 $51498621.70
FCI2 $51498621.70
Working Capital $20,599,448.70 at the end of year 2
YS Revenue $285,014,600.00
Cost of manufacturing $941,990,324.90
Salvage value plant $2,988,000.00

COMd = 0.180FCI + 2.73COL +1.23(CUT + CWT + CRM)

= 0.18($102,997,243.30) + 2.73($252,274,568.00) +1.23($140,685.30 + $4969 +

$197,951,861.90)

= $264,222,748

FCIn = 50% from FCI

Working Capital = 20 % from FCI

Non-Discounted Profitibility Criteria

Cumulative Cash Position (millions) 91.72

Rate of Return on Investment 8.91%

Payback Period (years) 5.0

CONCLUSION

Based on the result of the economic analysis, we can determine the break even point that is
1195 ton/year which mean this plant will only start to get the income after manage to
manufacture that amount of lithium carbonate. Based on the calculation above, the payback
period that are calculated is around 5 years which is approximately that the plant will obtain
its full investment back. From the calculation of costing above, we used the different method
of calculating the cost. Some are using the manual steps to determine the cost while others
can also use the CAPCOST estimation software. In this case, some of the estimation of cost
we use the manual technique and others we use the CAPCOST estimation software. The
CAPCOST estimation software some how it is very helpful in order to determine the costing
of a plant in a short time given.

Thus, by considering of all the factors that are being said above it is wise and crucial to
determine and consider all of the aspects in order to have a good view of economic analysis
even it is just using estimation value. The method that are used in the estimating the value is
by taking the maximum value of any price because it can reduce the floating of budget.
While the most important issue is the total cost is not exceeding the budget that are given.
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Water cost. http://leeskoreablog.blogspot.my/2010/04/arisu-seoul-city-tap-water.html.

Retrieved on 20 December 2016.
Dangjin Power Station (parent company: Korea Electric Power Corporation (KEPCO)
For industrial. http://www.dgfez.net/eng/page.php?mnu_uid=492. Retrieved on 20
December 2016
Chemical Plant Engineering Cost Index.
http://www.cheresources.com/invision/topic/21446-chemical-engineering-plant-cost-
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