1. Discuss the factors that should be considered in selecting a plant site.

The following factors should be considered in selecting a plant site:

Raw materials availability

Markets

Energy availability

Climate

Transportation facilities

Water supply

Waste disposal

Labor supply

Taxation and legal restrictions

Site characteristics

Flood and fire protection .

Community factors

2. Discuss the factors to be considered for the proper layout of a chemical plant.
Proper layout in each case will include arrangement of processing areas, storage
areas, and handling areas in efficient coordination and with regard to such factors
as:
New site development or addition to previously developed site
Type and quantity of products to be produced
Type of process and product control
Operational convenience and accessibility
Economic distribution of utilities and services
Type of buildings and building-code requirements
Health and safety considerations
Waste-disposal requirements
Auxiliary equipment
Space available and space required
 Roads and railroads
Possible future expansion

3. Discuss various types of flow diagrams.

The chemical engineer uses flow diagrams to show the sequence of equipment and unit
operations in the overall process, to simplify visualization of the manufacturing
procedures, and to indicate the quantities of materials and energy transfer. These
diagrams may be divided into three general types:

(1) qualitative (2) quantitative, and (3) combined-detail

A qualitative flow diagram indicates the flow of materials, unit operations involved,
equipment necessary, and special information on operating temperatures and
pressures. A quantitative flow diagram shows the quantities of materials required
for the process operation. An example of a qualitative flow diagram for the
production of nitric acid is shown in Fig.1. Figure 2. presents a quantitative flow
diagram for the same process.
Preliminary flow diagrams are made during the early stages of a design project. As
the design proceeds toward completion, detailed information on flow quantities and
equipment specifications becomes available, and com- bined-detail flow diagrams
can be prepared.

4. what is depreciation? Discuss Purposes and types of depreciation.

The reduction in value due to any of these causes is a measure of the depreciation.
Depreciation as a cost allows for realistic evaluation of profits and determination
of Federal income taxes. It also helps set aside funds for capital recovery.
Accountants must follow U.S. Bureau of Internal Revenue rules for income tax
determination, including allowable life and mathematical procedures. Engineers
should be familiar with Federal regulations for accurate depreciation accounting.
Depreciation can be physical or functional, with physical depreciation resulting from
wear and tear, corrosion, accidents, or deterioration. Functional depreciation, on
the other hand, is caused by technological advancements, making an existing
property obsolete. Other causes include changes in market demand, population
shifts, public authority requirements, insufficient capacity, termination of service
needs, and abandonment of the enterprise. Both types of depreciation reduce a
property's serviceability and value.
5. Discuss methods for determining depreciation.
 Depreciation costs can be determined by a number of different methods, and the
design engineer should understand the bases for the various methods.
In general, depreciation accounting methods may be divided into two classes: (1)
arbitrary methods giving no consideration to interest costs, and (2) methods taking
into account interest on the investment. Straight-line, declining-balance, and sum-
of-the-years-digits methods are included in the first class, while the second class
includes the sinking-fund and the present-worth methods.

6. Determination of depreciation by straight-line and declining-balance methods. The

original value of a piece of equipment is $22,000, completely installed and ready for
use. Its salvage value is estimated to be $2000 at the end of a service life
estimated to be 10 years. Determine the asset (or book) value of the equipment at
the end of 5 years using: (a) Straight-line method. (b) Textbook declining-balance
method.

Solution

(a)Straight-line method:

V = $22,000

Vs = $2000

n = 10 years

d = (V-Vs) / n = 20000/10 = $2000/year

Asset value after 5 years = Va Where a = 5, or

Va = V- ad = 22000- (5)(2000) = $12,000

(b) Textbook declining-balance method:

f = 1- (Vs/V)^1/n = 1- (2000/22000)^1/10 = 0.2131

Asset value after 5 years is

Va = V(1-f)^a = (22000)(1- 0.2131)^5 = $6650

7. what is profitability? Discuss mathematical methods for profitability evaluation.

The word profitability is used as the general term for the measure of the amount of
profit that can be obtained from a given situation. Profitability, therefore, is the
common denominator for all business activities.

The most commonly used methods for profitability evaluation, can be categorized
under the following headings:

 Rate of return on investment

 Discounted cash flow based on full-life performance

 Net present worth

 Capitalized costs

 Payout period

RATE OF RETURN ON INVESTMENT. In engineering economic studies, rate of

return on investment is ordinarily expressed on an annual percentage basis. The yearly
profit divided by the total initial investment necessary represents the fractional
return, and this fraction times 100 is the standard percent return on investment.

• Profit is defined as the difference between income and expense. Therefore, profit
is a function of the quantity of goods or services produced and the selling price.
The amount of profit is also affected by the economic efficiency of the operation,
and increased profits can be obtained by use of effective methods which reduce
operating expenses.

8. A proposed manufacturing plant requires an initial fixed capital investment of

$900,000 and $100,000 of working capital. It is estimated that the annual income
will be $800,000 and the annual expenses including depreciation will be $520,000
before income taxes. A minimum annual return of 15 percent before income taxes is
required before the investment will be worthwhile. Income taxes amount to 34
percent of all pre-tax profits. Determine the following: (a) The annual percent
return on the total initial investment before income taxes. (b) The annual percent
return on the total initial investment after income taxes. (c) The annual percent
return on the total initial investment before income taxes based on capital recovery
with minimum profit. (d) The annual percent return on the average investment
before income taxes assuming straightline depreciation and zero salvage value.
 (a) Annual profit before income taxes = $800,000 -$520,000 = $280,000.
Annual percent return on the total initial investment before income taxes =
[ 280,000 /(900,000 + 100,000)](100) = 28 percent.
(b) Annual profit after income taxes =( $280,000)(0.66) = $184,800.
Annual percent return on the total initial investment after income taxes =
[184,800/(900,000+100,000)](100) = 18.5 percent
(c) Minimum profit required per year before income taxes = ($900,000 +
$100,000)(0.15) = $150,000.
Fictitious expenses based on capital recovery with minimum profit = $520,000
+ $150,000 = $670,000/year . Annual percent return on the total investment based
on capital recovery with minimum annual rate of return of 15 percent before income
taxes = [(800,000 – 670,000) / (900,000 + 100,000)](100) = 13 percent.
(d) Average investment assuming straight-line depreciation and zero salvage value
= $900,000/2 + $100,000 = $550,000.
Annual percent return on average investment before income taxes
=(280,000/550,000)(100) = 51 percent.

9. Discuss the basic principle of an optimum design.

An optimum design is based on the best conditions, often considering costs or
profits. It can be the least cost per unit of time or maximum profit per unit of
production. When one design variable changes, costs may increase or decrease,
resulting in a minimum at one design variable, which is considered an optimum.
An example illustrating the principles of an optimum economic design is presented in
Fig. 1. In this simple case, the problem is to determine the optimum thickness of
insulation for a given steam-pipe installation. As the insulation thickness is
increased, the annual fixed costs increase, the cost of heat loss decreases, and all
other costs remain constant. Therefore, as shown in Fig. 1, the sum of the costs
must go through a minimum at the optimum insulation thickness.
10. Discuss the break-even chart for the production schedule and its significance for
optimum analysis
The fraction of total available time during a plant's operation significantly impacts
its economic results. Idle or low-capacity plants reduce costs like raw materials and
labor, but depreciation and maintenance costs remain constant. The relationship
between operating time, rate of production, and selling price is close. It's important
to operate at a schedule that maximizes fixed costs while meeting market sales
demand and using plant capacity for optimal results. The break-even point is where
total product cost equals total income, and the optimal production schedule should
be higher than that point.
Fig. Break-even chart for operating production plant