Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi, I'm in desperate need of helping. I'm actually engineering student, but I'm required to work on business ( finance,econ) related problem. With zero background

Hi, I'm in desperate need of helping. I'm actually engineering student, but I'm required to work on business ( finance,econ) related problem. With zero background in business, I don't know all of the technical words meaning and equations to find them. Pictues belows are the problem statements. I highlighted the words that I want to know the meaning and the equations to find them. Can you please show me what those words mean and what equations do I need in order to find them? I'll be forever thankful.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Problem 2: Economics of Methanol from Methane (Due Monday, October 2) The economics of a proposed 1500 ton/day (TPD) plant to produce methanol from methane are being analyzed. The plant would be constructed over a two-year period and then operated for ten years Additional investment and operating-expense data are provided below a. Calculate the methanol manufacturing costs (variable and fixed) as cost/year and cost/ton. b. Calculate the methanol selling prices that would give discounted cash-flow rates of return (DCFRR) of 10% and 18% c. Assuming a 7% discount rate, calculate the net present worth (net present value) of the plant at the end of the project if it were operated at the prices calculated in part (b), d. To investigate the effect of scale, repeat (a), (b), and (c) for a 1200 TPD plant e. Repeat (a), (b), (c), and (d) assuming the working capital is borrowed at an annual interest rate of 8% f. For the 1500 TPD plant, determine the sensitivity of the manufacturing costs and selling price to variations in capital investment and costs of raw materials, utilities, and labor g. Determine the DCFRR for the 1200 TPD plant for the selling price determined in part (b) h. For the 1500 TPD plant, determine the breakeven production rate and selling price i. If, after the 1500 TPD plant's first year of operation, the capacity were increased 15% with no new investment, determine the new methanol manufacturing cost and selling price for the DCFRR values assumed in part (b) j. Compare different profitability measures for the 1500 and 1200 TPD plants based on 1) the current methanol commodity selling price and 2) the selling price determined in part b. The comparisons should include DCFRR, ROL,DCF, CFPP, ROI, NPW cash flow payback period, and net present worth

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Energy Trading

Authors: Stefano Fiorenzani, Samuele Ravelli, Enrico Edoli

1st Edition

1119953693, 978-1119953692

More Books

Students also viewed these Finance questions