Code No: RR410803 Set No.

1
IV B.Tech I Semester Supplimentary Examinations, November 2007
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
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1. Synthesis gas may be prepared by a continuous, non catalytic conversion of any

hydrocarbon by means of controlled partial combustion in a fire-bride lined reactor.
The hydrocarbon and oxidant ( oxygen or air ) are separately pre heated and
charged to the reactor. Before entering the reaction zone the tow feed stocks are
intimately mixed in a combustion chamber. The heat produced by combustion part
of the hydrocarbon pyrolyzes remaining hydrocarbons into gas and a small amount
of carbon in reaction zone. The reactor efficient then passes through a waste heat
boiler, a water-wash carbon-removal unit, and a water cooler-scrubber. Carbon is
recovered in equipment of simple design in a firm which can be used as fuel or in
ordinary carbon products. Prepare a simplified equipment flow sheet in the process,
with temperatures-and pressure. [16]

2. In terms of plant location, what are the important factors that should be consid-
ered? Discuss. [16]

3. (a) Write about estimating equipment costs by scaling. [6]

(b) The purchased cost of a 200 liters glass-lined, jacketed reactor was Rs. 8,350 in
1981. Estimate the purchased cost of a similar 1200 liters glass-lined, jacketed
reactor in 1986. The equipment cost index for1981 is 721, and for 1986 is 798.
The equipment versus capacity exponent may be taken as 0.54. [10]

4. (a) Write short notes on various types of interests. [8]

(b) What are annuities? Explain various annuities. [8]

5. The fixed capital investment for an existing chemical plant is Rs 10,00,000. Annual
property taxes amount to 1% of fixed capital investment and the state income taxes
are 5% of gross earnings. The net income per year after all taxes is Rs 20,00,000
and the fedral income taxes amount to 34% of gross earnings. If the same plant had
been constructed at a location where property taxes were 4% of the fixed capital
investment and the state income taxes were 2% of gross earnings, what would be the
net income per year after taxes? Assume that all other cost factors were unchanged.
[16]

6. (a) What is sinking fund method for the determination of depreciation? [4]
(b) Derive an equation for asset value of equipment after few years of use by the
application of sinking fund method. [6]
(c) Compare sinking fund method with straight-line method. [6]

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Code No: RR410803 Set No. 1
7. (a) Discuss rate of return and payout time methods of selecting alternatives? [6]
(b) A distillation column, which is made of mild steel costs Rs.75,000/- and the
useful life period will be 4 years. If the Column is made of stainless steel, the
initial cost would be Rs.2,25,000. The scrap value at the end of the useful
life would be zero for either type of the column and both could be replaced
at a cost equal the original price. On the basis of equal capitialised cost for
both types of distillation columns, what should be the useful life period for
the stainless steel column, if money is worth 12 percent compounded annually.
[10]

8. (a) Derive an expression for determing the optimum coolant temperature in a

cooler assuming that the total cost is made-up of the operating cost (the
coolant and pumping cost) and Capital
Cost (may be considered to be proportional to the Heat transfer Area). [8]
(b) An Organic Liquid is to be cooled from 75 to 55 C in a shell and tube unit
using cooling water available at 25 C. The plant operates 300 days an year.
The water cost, including pumping is estimated to be Rs.l.0/m3 . The installed
cost of the Exchanger is Rs.l,000 per m2 and it is to be depreciated over 8
years. Assume interest, maintenance and Fixed charges amount to 15% of
the installed cost per annum and a suitable value for overall coefficient. Find
optimum water out-let temperature. [8]

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Code No: RR410803 Set No. 2
IV B.Tech I Semester Supplimentary Examinations, November 2007
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆⋆⋆⋆⋆

1. (a) Discuss briefly the practical considerations in design. [8]

(b) Briefly explain the overall design considerations. [8]

2. Discuss about the sources of exposure to health hazards and exposure-hazard con-
trol in a chemical plant. [16]

3. The total capital cost for a plant is Rs. 12 crores and produces 9 million kg of a
chemical product per year, selling at an average price of Rs. 10 per kg. The annual
fixed charges amount to Rs. 1.9 crores. Distribution costs amount to 4% of the
total cost of manufacturing. Costs per kg of input are: Raw materials Rs. 3, labor
Rs. 1.25, utilities Re. 0.75 and packaging Re. 0.20. Estimate the following:

(a) Total cost of manufacturing per year and per kg of product. [6]
(b) Total product cost per year. [5]
(c) Profit per kg of product (gross). [5]

4. (a) Write short notes on various types of interests. [8]

(b) What are annuities? Explain various annuities. [8]

5. During the period of one taxable year at a manufacturing plant, the total income
on cash basis was $ 21 million. Five million dollars of immediate debts due to the
company was paid at the end of the year. The company paid out $ 15 million on
a cash basis during the year, and all of this amount was tax-deductible as product
cost. The company still owed $ 3 million of tax-deductible bills at the end of the
year. If the total Federal Income Tax for the company amounts to 48 % of the
gross earnings, determine the amount of Federal Income Tax due for the year on a
cash basis and also on accrual basis. [16]

6. (a) What do you understand by single unit and group depreciation? State them
clearly. [6]
(b) Differentiate between classified accounts and vintage-group accounts. [4]
(c) Give salient features of accelerated cost recovery system for determining
depreciation allowances. [6]

7. An investigation of a proposed investment has been made. The following result

has been presented to the management. The minimum payout period based on
capital recovery using a minimum annual return of 10percent as a fictious expense
is 10 years. annual depreciation costs amount to 8 percent of the total investment.

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Code No: RR410803 Set No. 2
Using this information, determine the standard rate of return on the investment.
[16]

8. Discuss the factors for optimum production rates in plant operations for minimum
cost per unit and maximum profit per unit. [16]

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Code No: RR410803 Set No. 3
IV B.Tech I Semester Supplimentary Examinations, November 2007
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆⋆⋆⋆⋆

1. Explain the Technical and Economic factors involved in Chemical plant design
process. [16]

2. (a) Write a brief note on the balance sheet. [4]

(b) Prepare a balance sheet applicable at the date when the X Corporation had
the following assets and equities: [12]
Cash Rs.20,000
Accounts payable: Common stock sold Rs.50,000
B Company 2,000 Machinery and equipment(at present value) 18,000
C Company 8,000 Furniture and fixtures(at present value) 5,000
Accounts receivable 6,000 Goverment Bonds 3,000
Inventories 15,000 Surplus 2,000
Mortgage payable 5,000

3. (a) Define break-even point, gross earnings and net profit. [6]
(b) A process plant making 2000 tons per year of a product selling for Rs. 0.80
per kg has annual direct production costs of Rs. 20,00,000 at 100 percent
capacity and other fixed costs of Rs. 7,00,000. What is the fixed cost per kg
at the break-even point? If the selling price of the product is increased by 10
percent, what is the increase in net profit at full capacity if the income tax
rate is 34 percent of gross earnings? [10]

4. (a) Derive the expression for effective annual interest rate in terms of the nominal
interest rate compounded continuously. [6]
(b) It is desired to borrow Rs. 20,000 to meet a financial obligation. This money
can be borrowed from a loan agency at a monthly interest rate of 2 percent.
Determine the following: [10]
i. The total amount of principal plus simple interest due after 2 years if no
intermediate payments are made.
ii. The total amount of principal plus compounded interest due after 2 years
if no intermediate payments are made.
iii. The nominal interest rate when the interest is compounded monthly.
iv. The effective interest rate when the interest is compounded monthly.

5. Write a brief account of : Tax Exemptions for Dividends Received, Contributions,

Carry-back and Carry-forward Losses. [16]

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Code No: RR410803 Set No. 3
6. (a) The original cost of a property is Rs. 3,00,000. It is depreciated by a 6 %
sinking fund method. What is the annual depreciation charge if the book
value of the property after 10 years is the same as it had been depreciated at
Rs. 25,000 per year by the straight-line method? [8]
(b) Draw a plot of asset value of a property for its service life by sinking fund
method. [8]

7. Discuss Rate of return based on the discounted cash flow with a suitable example.
[16]

8. Explain the concept of economic balance with suitable examples. What are the
factors considered in determining the optimum insulation thickness? [16]

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Code No: RR410803 Set No. 4
IV B.Tech I Semester Supplimentary Examinations, November 2007
CHEMICAL ENGINEERING PLANT DESIGN AND ECONOMICS
(Chemical Engineering)
Time: 3 hours Max Marks: 80
Answer any FIVE Questions
All Questions carry equal marks
⋆⋆⋆⋆⋆

1. Explain the Technical and Economic factors involved in Chemical plant design
process. [16]

2. (a) Write a brief note on the income statement. [4]

(b) During the month of October, the following information was obtained in an
antifreeze retailing concern: [12]
Salaries Rs.3,000
Delivery expenses 700
Rent 400
Sales 15,100
Antifreeze available for sale during October(at cost) 20,000
Antifreeze inventory on October 31(at cost) 11,600
Other expenses 1,200
Earned surplus before income taxes as september 30 800
Machinery and equpment(at present value) 18,000
Prepare an income statement for the month of October giving as much detail as
possible.

3. (a) What is six-tenths-factor rule? Where is it used? [6]

(b) The purchased and installation costs of some pieces of equipment are given as
a function of weight rather than capacity. An example of this is the installed
costs of large tanks. The 1980 cost for an installed aluminum tank weighing
100 kg was Rs. 3,90,000. For a size range from 200 to 1000 kg, the installed
cost-weight exponent for aluminum tanks is 0.93. If an aluminum tank weigh-
ing 700 kg is required, what is the present capital investment needed? [10]

4. A new storage tank can be purchased and installed for Rs. 10,000. This tank would
last for 10 years. A worn out storage tank of capacity equivalent to the new tank
is available, and it has been proposed to repair the old tank instead of buying the
new tank. If the tank were repaired, it would have a useful life of 3 years before
the same type of repairs would be needed again. Neither tank has any scrap value.
Money is worth 9 percent compounded annually. On the basis of equal capitalized
costs for the two tanks, how much can be spent for repairing the existing tank?[16]

5. The gross earnings for a small corporation were $ 54,000 in 1960. What would have
been the % reduction in Federal Income Taxes paid by the company if the tax rates
in effect in 1973 had been in effect in 1960 ? [16]

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Code No: RR410803 Set No. 4
6. (a) What do you understand by single unit and group depreciation? State them
clearly. [6]
(b) Differentiate between classified accounts and vintage-group accounts. [4]
(c) Give salient features of accelerated cost recovery system for determining
depreciation allowances. [6]

7. Explain profitability, profitability standards and methods for profitability evalua-

tion. [16]

8. (a) Derive an expression for determing the optimum coolant temperature in a

cooler assuming that the total cost is made-up of the operating cost (the
coolant and pumping cost) and Capital
Cost (may be considered to be proportional to the Heat transfer Area). [8]
(b) An Organic Liquid is to be cooled from 75 to 55 C in a shell and tube unit
using cooling water available at 25 C. The plant operates 300 days an year.
The water cost, including pumping is estimated to be Rs.l.0/m3 . The installed
cost of the Exchanger is Rs.l,000 per m2 and it is to be depreciated over 8
years. Assume interest, maintenance and Fixed charges amount to 15% of
the installed cost per annum and a suitable value for overall coefficient. Find
optimum water out-let temperature. [8]

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