Economic Evaluation of Projects

Alexandre C. Dimian, Costin S. Bildea, Anton A. Kiss

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

The economic analysis presented in this chapter is oriented mainly to the estimation of the total investment cost, which is a key objective in conceptual design. The degree of details in costing evaluation depends on the type of projects. For preliminary design, this can be ±. 30%. For student projects, the inaccuracy is even larger taking into account the difficulty of performing sizing for some unit operations and of finding suitable costing data. However, more important is the educational value of the computations, with respect to specifying, selecting and sizing the equipment, as well as to market and suppliers. A second objective is highlighting the concepts of profitability, such as return of investment, payback time and discounted cash flow. The profitability is affected by the time variation of money, namely the interest rate of credits and the inflation. In an uncertain economic environment, introducing new products of higher added value creates the opportunities of a better profit.

Original languageEnglish
Pages (from-to)717-755
Number of pages39
JournalComputer Aided Chemical Engineering
Volume35
DOIs
Publication statusPublished - 2014

Fingerprint

Profitability
Economics
Economic analysis
Conceptual design
Students
Costs

Keywords

  • Capital costs
  • Economic analysis
  • Economic evaluation
  • Operation costs
  • Profitability analysis

ASJC Scopus subject areas

  • Chemical Engineering(all)
  • Computer Science Applications

Cite this

Economic Evaluation of Projects. / Dimian, Alexandre C.; Bildea, Costin S.; Kiss, Anton A.

In: Computer Aided Chemical Engineering, Vol. 35, 2014, p. 717-755.

Research output: Contribution to journalArticle

Dimian, Alexandre C. ; Bildea, Costin S. ; Kiss, Anton A. / Economic Evaluation of Projects. In: Computer Aided Chemical Engineering. 2014 ; Vol. 35. pp. 717-755.
@article{a68a0cb818834369a41b2bc80c3495fa,
title = "Economic Evaluation of Projects",
abstract = "The economic analysis presented in this chapter is oriented mainly to the estimation of the total investment cost, which is a key objective in conceptual design. The degree of details in costing evaluation depends on the type of projects. For preliminary design, this can be ±. 30{\%}. For student projects, the inaccuracy is even larger taking into account the difficulty of performing sizing for some unit operations and of finding suitable costing data. However, more important is the educational value of the computations, with respect to specifying, selecting and sizing the equipment, as well as to market and suppliers. A second objective is highlighting the concepts of profitability, such as return of investment, payback time and discounted cash flow. The profitability is affected by the time variation of money, namely the interest rate of credits and the inflation. In an uncertain economic environment, introducing new products of higher added value creates the opportunities of a better profit.",
keywords = "Capital costs, Economic analysis, Economic evaluation, Operation costs, Profitability analysis",
author = "Dimian, {Alexandre C.} and Bildea, {Costin S.} and Kiss, {Anton A.}",
year = "2014",
doi = "10.1016/B978-0-444-62700-1.00019-X",
language = "English",
volume = "35",
pages = "717--755",
journal = "Computer Aided Chemical Engineering",
issn = "1570-7946",
publisher = "Elsevier",

}

TY - JOUR

T1 - Economic Evaluation of Projects

AU - Dimian, Alexandre C.

AU - Bildea, Costin S.

AU - Kiss, Anton A.

PY - 2014

Y1 - 2014

N2 - The economic analysis presented in this chapter is oriented mainly to the estimation of the total investment cost, which is a key objective in conceptual design. The degree of details in costing evaluation depends on the type of projects. For preliminary design, this can be ±. 30%. For student projects, the inaccuracy is even larger taking into account the difficulty of performing sizing for some unit operations and of finding suitable costing data. However, more important is the educational value of the computations, with respect to specifying, selecting and sizing the equipment, as well as to market and suppliers. A second objective is highlighting the concepts of profitability, such as return of investment, payback time and discounted cash flow. The profitability is affected by the time variation of money, namely the interest rate of credits and the inflation. In an uncertain economic environment, introducing new products of higher added value creates the opportunities of a better profit.

AB - The economic analysis presented in this chapter is oriented mainly to the estimation of the total investment cost, which is a key objective in conceptual design. The degree of details in costing evaluation depends on the type of projects. For preliminary design, this can be ±. 30%. For student projects, the inaccuracy is even larger taking into account the difficulty of performing sizing for some unit operations and of finding suitable costing data. However, more important is the educational value of the computations, with respect to specifying, selecting and sizing the equipment, as well as to market and suppliers. A second objective is highlighting the concepts of profitability, such as return of investment, payback time and discounted cash flow. The profitability is affected by the time variation of money, namely the interest rate of credits and the inflation. In an uncertain economic environment, introducing new products of higher added value creates the opportunities of a better profit.

KW - Capital costs

KW - Economic analysis

KW - Economic evaluation

KW - Operation costs

KW - Profitability analysis

UR - http://www.scopus.com/inward/record.url?scp=84908001591&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84908001591&partnerID=8YFLogxK

U2 - 10.1016/B978-0-444-62700-1.00019-X

DO - 10.1016/B978-0-444-62700-1.00019-X

M3 - Article

VL - 35

SP - 717

EP - 755

JO - Computer Aided Chemical Engineering

JF - Computer Aided Chemical Engineering

SN - 1570-7946

ER -