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MBA, PHD
Phoniex
Jul-2007 - Jun-2012
Corportae Manager
ChevronTexaco Corporation
Feb-2009 - Nov-2016
Question description
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A 325 000 t per year methanol plant built in Australia 5 years ago cost  Aus $120 million. Process improvements have caused the complexity to reduced from 15 process steps to 11. Environmental requirements will cost an adittional 20% over those for Australia. Plan cost escalation has averaged 4% per year in Belgium over the las 10 yearsÂ
a. Estimate the capital cost ( million of euros) of a 500 000 per year methanol plant to be build in Belgium with construction starting next year.
b. What is the annual average surplus (net cash flow) per tonne methanol required to give an average  Return on Investment  of 15% on the fixed Investment, with a plant life of 10 years ?
Data
Cost indices:             Australia         Belgium
5 y ago                 124             139
3 y ago                 136             157
1 y ago                 152             183
Exchange rates:
5 y ago         euro 0.9 per Aus$
3 y ago         euro 1.2 per Aus$
Now           euro 1.4 per Aus$
Location factors:
5 y ago      Belgium:Australia  1.08:1.0
Plant scale factor: 0.6
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