U.S.N.

BMS College of Engineering, Bangalore-560019

(Autonomous Institute, Affiliated to VTU, Belgaum)

December 2016 Semester End Main Examinations

Course: Process Plant Design & Economics Duration: 3 hrs.
Course Code: 11BT7DCPEE Max Marks: 100
Date: 14.12.2016

Instructions: 1. Answer any five full questions choosing one from each unit.
2. Assume missing data (if any) suitably

UNIT 1
1 a) What is an industrial plant? Analyze the factors influencing the selection of plant 10
location.
b) Discuss in detail the various steps involved in a process design development. 10
UNIT 2
2 a) Describe Williamson Factor used in cost estimation. 08
Calculate the cost of a vacuum filter (rotary) 5m long, 2m diameter in 1984. If the cost of
similar filter was Rs.30,000 per 50m2 of peripheral area in 1974. The cost index in 1974
is 151 and in 1984 is 182.
b) Illustrate with a tree diagram, the cash flow for industrial operations. 12

UNIT 3
3 a) Explain in detail the various cost components of total product cost. 06
b) A factory is making a pipe fitting by 08
a. Casting
b. Forging
The cost data is as follows:
Item Casting Forging
Material cost/piece in Rs. 2 2
Time required to make one 3 hrs 48 min
fitting
Labour rate 0.80/hr 0.80/hr
Overheads 25% of labour cost 150% of labour cost
Calculate the total cost of each fitting for two cases.
c) A small scale industrial unit is producing 100 vanishing cream bottles per day. The direct 06
material cost is found to be Rs.160, the direct labour cost is Rs.200 and factory overhead
is Rs.250. If the selling on cost is 40% of the factory cost, what must be the selling price
of each bottle to realize a profit of 14.6% of selling price?
 OR
4 a) What is break-even point? Derive an equation for finding break-even point if variable 10
cost is linearly dependent on production and draw a typical economic production chart.
b) The total capital investment for a conventional chemical plant is Rs. 15,00,000 and the 10
plant produces 3 million kgs. of product annually. The selling price of the product is Rs.
0.41/kg, working capital amounts is 15% of total capital investment. The investment is
from company funds and no interest is charged. Raw material costs for the products are
Rs. 0.045/kg, labour Rs. 0.04/kg, utilities Rs. 0.025/kg and packing Rs. 0.04/kg,.
distribution costs are 5% of total product cost. Estimate,
a. Working & fixed capital cost
b. Manufacturing cost/kg of product
c. Total product cost/year
d. Profit/kg of product before taxes
UNIT 4
5 a) Explain present worth and future worth factor with an example. 10
Two machines have the following cost comparisons. If money worth is 8% which
machine is more economical?
Item A B
Installation cost (Rs) 2,20,000 1,50,000
Salvage value (Rs) 15,000 4,000
Uniform maintenance 30,000 40,000
cost (Rs) /year
Life (years) 3 2

b) List the different types of taxes. 10

It is desired to borrow Rs.1000 to meet a financial obligation. This money can be
borrowed from a loan agency at a monthly rate of 2 percent. Determine the following:
(i) The total amount of principal plus simple interest due after 2 years.
(ii) The total amount of principal plus compound interest due after 2 years.
(iii) The nominal interest rate when the interest is compounded monthly.
(iv) The effective interest rate when the interest is compounded monthly.
OR
6 a) A machine is purchased for Rs.1,00,000/- and the estimated life of 5years with negligible 12
salvage value. If the rate of interest on depreciable fund is 6%. Calculate the rate of
depreciation by,
a) straight line method,
b) sum of digits method and
c) sinking fund method
Compare the results in the table.
b) Explain Annuity. How is the present worth of annuity amount calculated? 08
Machine A, operated manually costs Rs.2000/-, has a life of 2 years. While an automatic
machine B costs Rs.3000 but has a life of 4 years. Operating cost per year for machine A
is Rs.4000/-, while that of machine B is Rs.3000/-. Salvage value of machine A is Rs.
100, while that of machine B is Rs.150. Which of the machines should be purchased?
Consider 10 % interest rate.
 UNIT 5
7 a) Find payout time for the following data. Interest rate of 10% a year is allowed on 08
investment. The initial fixed capital investment is 10,00,000 and the working capital
investment is 15% of the fixed capital investment.
Time (Years) 0-1 1-2 2-3 3-4 4-5
Cashflow (Rs) 2,00,000 2,70,000 3,30,000 4,00,000 4,75,000
b) A company has 4 alternative design and wants to select best among them. The company 12
requires min 10% rate of return on investment. Using the following data select the best
design.
Item Design 1 Design 2 Design 3 Design 4
Initial installed cost 10,000 16,000 20,000 26,000

Operating cost 100 100 100 100

Fixed charges 20% 20% 20% 20%
(%of initial cost) (2000) (3200) (4000) (5200)

Cash flow /year 4,100 6,000 6,900 8,850

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