7. (20 pts) Economic analysis or benefit-cost analysis (BCA) of a Material Recovery Facility (MRF) includes the consideration of the cost of collection from a curbside recycling program, the cost of processing, the avoid landfill cost (i.e., tipping fees) from reducing the amount of waste sent for disposal, and the market value of the recycled materials. After a thorough invesitgation for a typical curbeside recycling program with known composition of recyclables, the collection cost is estimated $123/ton. Estimated total construction cost for a MRF is $2,262,700 and its average construction cost $22,627 $/ton/day (or $/TPD) with a throughput capacity of 100 TPD. Estimated capital cost also includes equipment cost for a throughout capacity of 100 TPD which is comprised of sorting systems (vonveyors, trommel screens, and magnets) and processing systems (balers, HDPE granulators, and glass crishers). The total equipment cost is $3,231,467 and its average cost is $32,315 $/TPD. Total capital 4 cost is equal to the summation of total construction cost, total equipment cost, and additional engineering cost, which is $2,262,700, $3,231,467, and $549,400, respectively, and the lump sum of capital cost is $6,043,600. Thus, the average capital cost for construction is $60,436 $/TPD. Total operating cost with a throughput capacity of 100 TPD inlcudes labor cost and operation and maintenance (O&M) cost. It is known that unit labor cost is $21.46 $/ton and unit O&M cost is $29.03 $/ton based on a national survey. Thus, unit operating cost is $50.49 $ton. However, tax and depreciation have not been included for this BCA assessment. Avoided disposal cost is $22 per ton. Assume that the operating cost remains the same over the facility life. The estimates of recycling rates and revenues for 100 tons of recovered materials is shown in Table 3 below based on recycling market. Note that with only 3% of mass, aluminum provides 37% of revenue. Assume that the recycling revenue remains the same over the facility life. Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials Materials Mass (ton) Price ($/ton) Revenue ($) % of Revenue 23 24 552 6 Newspaper#6 Corrugated cardboard 48 70 3,360 38 High grade paper 8 73 584 7 Steel cans 5 56 280 3 Aluminum cans 3 1080 3240 37 Clear PETE 1 100 100 1 Green PETE 1 100 100 1 Natural HDPE 1 320 320 4 Glass 10 25 250 3 Total 100 1,848 8,786 100 Debt service based on an interest rate of 10% and amortized over 20 years for facility and 5 equipment can be used for calculation of the uniform cash flow of amortized capital cost via the annual equivalent model below: i (1 + i)" A = P (1 + i)" - 1 where i is interest rate per interest period, n is number of interest period, P is sum of money at a time denoted as present, and A is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor. Thus, the average net cost ($/ton) as present value is defined below: average net cost ($/ton) = unit capital cost ($/ton) + unit collection cost ($/ton) + unit operating cost ($/ton) - unit income from recycling ($/ton) - unit avoided cost ($/ton) 1) What is the average net cost of running the MRF decribed in above? 2) What is the benefit/cost ratio? Is the MRF project economically viable? 7. (20 pts) Economic analysis or benefit-cost analysis (BCA) of a Material Recovery Facility (MRF) includes the consideration of the cost of collection from a curbside recycling program, the cost of processing, the avoid landfill cost (i.e., tipping fees) from reducing the amount of waste sent for disposal, and the market value of the recycled materials. After a thorough invesitgation for a typical curbeside recycling program with known composition of recyclables, the collection cost is estimated $123/ton. Estimated total construction cost for a MRF is $2,262,700 and its average construction cost $22,627 $/ton/day (or $/TPD) with a throughput capacity of 100 TPD. Estimated capital cost also includes equipment cost for a throughout capacity of 100 TPD which is comprised of sorting systems (vonveyors, trommel screens, and magnets) and processing systems (balers, HDPE granulators, and glass crishers). The total equipment cost is $3,231,467 and its average cost is $32,315 $/TPD. Total capital 4 cost is equal to the summation of total construction cost, total equipment cost, and additional engineering cost, which is $2,262,700, $3,231,467, and $549,400, respectively, and the lump sum of capital cost is $6,043,600. Thus, the average capital cost for construction is $60,436 $/TPD. Total operating cost with a throughput capacity of 100 TPD inlcudes labor cost and operation and maintenance (O&M) cost. It is known that unit labor cost is $21.46 $/ton and unit O&M cost is $29.03 $/ton based on a national survey. Thus, unit operating cost is $50.49 $ton. However, tax and depreciation have not been included for this BCA assessment. Avoided disposal cost is $22 per ton. Assume that the operating cost remains the same over the facility life. The estimates of recycling rates and revenues for 100 tons of recovered materials is shown in Table 3 below based on recycling market. Note that with only 3% of mass, aluminum provides 37% of revenue. Assume that the recycling revenue remains the same over the facility life. Table 3: The estimates of recycling rates and revenues for 100 tons of recovered materials Materials Mass (ton) Price ($/ton) Revenue ($) % of Revenue 23 24 552 6 Newspaper#6 Corrugated cardboard 48 70 3,360 38 High grade paper 8 73 584 7 Steel cans 5 56 280 3 Aluminum cans 3 1080 3240 37 Clear PETE 1 100 100 1 Green PETE 1 100 100 1 Natural HDPE 1 320 320 4 Glass 10 25 250 3 Total 100 1,848 8,786 100 Debt service based on an interest rate of 10% and amortized over 20 years for facility and 5 equipment can be used for calculation of the uniform cash flow of amortized capital cost via the annual equivalent model below: i (1 + i)" A = P (1 + i)" - 1 where i is interest rate per interest period, n is number of interest period, P is sum of money at a time denoted as present, and A is a series of equal, consecutive, and end-of-period amounts of money (annual equivalent cash flow in thi scase). The term in the bracket is called the Capital Recovery Factor. Thus, the average net cost ($/ton) as present value is defined below: average net cost ($/ton) = unit capital cost ($/ton) + unit collection cost ($/ton) + unit operating cost ($/ton) - unit income from recycling ($/ton) - unit avoided cost ($/ton) 1) What is the average net cost of running the MRF decribed in above? 2) What is the benefit/cost ratio? Is the MRF project economically viable