(a) You are trying to decide the plant size for a new chemical production process. By considering three alternative plant sizes, estimate the minimum plant size to achieve a 14% Discounted Cash Flow rate of return using the data given in TABLE Q2 (When choosing alternative plant sizes, it is suggested to use ±50,000 t y')

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(a) You are trying to decide the plant size for a new chemical production
process. By considering three alternative plant sizes, estimate the
minimum plant size to achieve a 14% Discounted Cash Flow rate of
return using the data given in TABLE Q2
(When choosing alternative plant sizes, it is suggested to use +50,000 t
y')
TABLE Q2
Current capital cost of a 100 000 t y1 plant
Construction time
€160 million
1
Net income
Plant life
Plant scale factor
year
400 € per tonne
5 years
0.67
Transcribed Image Text:(a) You are trying to decide the plant size for a new chemical production process. By considering three alternative plant sizes, estimate the minimum plant size to achieve a 14% Discounted Cash Flow rate of return using the data given in TABLE Q2 (When choosing alternative plant sizes, it is suggested to use +50,000 t y') TABLE Q2 Current capital cost of a 100 000 t y1 plant Construction time €160 million 1 Net income Plant life Plant scale factor year 400 € per tonne 5 years 0.67
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