You work for a chocolate producer, specialising in the manufacture of imported cocoa into chocolate bars, approx. 32000 tonnes a year. Your company is considering expanding and developing a new product line, producing a higher quality product, necessitating a different mixing, and then processing steps, approximately 2000 tonnes a year, an increase of 6.25% in production. You are to provide an initial project appraisal for this project and provide a report to your manager and the board of directors showing the calculations and figures generated. This report will be an outline of the appraisal, the methods used and a guide through the calculations. The questions to include answers in your report are listed on the next page and a summary of assumptions and information is provided in the following sections. Questions 1) Why have you been asked to complete this brief by the company? (10\%) 2) What is the total installed cost (fixed capital investment) of the project, give clear indications as to how this has been estimated? (40\%) 3) What does the (labelled) Cash flow diagram look like for the project? (20\%) 4) What is the NET Present Value of the project for each year? (10\%) 5) What is the ROR? (10\%) 6) Is the Project Viable in your opinion? (10\%) Supplementary Information and Useful links Chocolate manufacture follows the basic process flow show below. The three raw materials, Cocoa, Sugar and Milk are taken and mixed in a heated mixed reactor. In this study the first unit can be considered a propellor mixer. The mixed stream is then pumped into a conching machine that further refines the material. This step is integral to the quality of the chocolate, the unit can be considered to be a pulveriser in this project appraisal. The refined mixture is then transferred to a tempering unit which heat treats the product producing the crystallinity required, in this study this can be considered to be a carbon steel cylindrical furnace. After this treatment step the mixture is moulded and the product is sent to packaging and shipping for preparation and sale. In this study it is assumed the factory architecture is in place for raw material handling and packaging. The study only considers the installation of an extra processing line, that is an initial mixer unit, a conch unit and a tempering unit. The main equipment required would be, Raw Material mix [ The capital costs are to be spent across the first two years of the project. This can be considered a small project for estimating purposes. For this study it can be considered that no wastes are produced and in need of disposal. And that as part of an established factory any additional consumable and/or packaging costs of the line are to be covered and not included in this costing exercise. As part of an existing facility only one additional shift position needs to be costed at 48.8kpa. The lifetime of the project should be taken as a twenty-year period. If required a discount rate of 10 % is recommended. No products are produced for the first two years of the project as the facility is being designed, installed, and commissioned. Years should be labelled 0-20, year 0 only land and labour costs are considered. Year 2 is the first year of production where working capital costs are incurred. In the first year of production the facility is run at 25% of capacity, from the second year of production forward the plant is expected to run at 50% of maximum capacity. The plant line will run 24 hours a day, 7 days a week, 50 weeks of the year, or 8400 hours a year.* *previous document version contained a typo here - students using that version won't be penalised* \begin{tabular}{|c|c|c|} \hline CurrentlyAvailableEquipmentCosts & Price & Capacity \\ \hline Unit & & Kg/hr \\ \hline Chocolate Mixer & 16000 & 100 \\ \hline Chocolate Conche & 12000 & 312 \\ \hline Chocolate Temper Unit & 21700 & 250 \\ \hline \end{tabular}