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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]
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