Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your company, Siegmeyer's Synthetics (SS), is in a bit of a pickle. You have already spent $50 million on the land acquisition and site preparation

Your company, Siegmeyer's Synthetics (SS), is in a bit of a pickle. You have already spent $50 million on the land acquisition and site preparation for a small gas-to-liquids (GTL) plant that you originally thought would be very profitable. Unfortunately, the price of natural gas has nearly doubled to $5.00 GJ-1 over the last year, which is bringing the profitability of the plant into question. The plant design has an overall efficiency of 80% (in terms of GJ of liquid fuels out to GJ of natural gas in). It can produce three different products at any time depending on demand and market price, but your analysts estimate that the steady price and demand for each product will be: 4 million L of Synthetic Diesel per year @ $0.80/L [Energy content of 40 MJ/L] 3 million L of Synthetic Gasoline per year @ $0.90/L [Energy content of 35 MJ/L] 2 million L of Liquefied Propane per year @ $0.75/L [Energy content of 25 MJ/L] 1. Compute the anticipated annual revenue of this plant. [2] 2. Compute the anticipated annual raw materials cost for this plant. [2]

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

Math For Business And Finance An Algebraic Approach

Authors: Jeffrey Slater, Sharon Wittry

1st Edition

0077639626, 9780077639624

More Books

Students also viewed these Economics questions

Question

Discuss how investment advisors can help their behavioral clients.

Answered: 1 week ago