Annualized Cost

A few measures of financial goodness are conceivable. As a rule, when creating and
looking at option flowsheets, an approximate productivity measure is adequate, for example, the
annualized cost:
C a=i m ( CTCI ) +C+ Heat Loss
Where CTCI
annually and C

is the total capital investment, i m is a reasonable return on investment

is the annual cost of sales.

In order to verify the annualized cost and the feasibility of this project, this formula was
developed.

C=( Feedstocks+Utilities+Operations+ Maintenance+Operating overhead + Property taxes+ Depreciati

As some of these variables were disregarded, for example, general expenses, operations
(labor-related), maintenance, operating overhead, property taxes and insurance, the major part of
its production cost is coming from depreciation, feedstock and utilities. Besides, this plant is selfsustainable, so the cost related to utilities was disregarded as well.
The depreciation is following a straight line depreciation method by which charges cost
evenly throughout the useful life of a plant. In order to calculate the feedstock, the initial amount
of deionized water, diethanolamine, and ethanolamine were calculated based on heuristics in
which the diameter and length of the pipeline were estimated, and then its volume. Besides, the
material that got into the system through the makeup was added, as well as the first amount of
raw material, to the cost of the feedstock, and cost using the price that was provided in class. In

addition, these numbers are based on 330 day of production per year and a reasonable return on
investment of 5%.