Course unit code:

N423N0_4I

Course unit title:

Cost Engineering of Industrial Projects

Mode of delivery, planned learning activities and teaching methods:

lecture – 2 hours weekly (on-site method)

Credits allocated:

2

Recommended semester:

Level of study:

2.

Prerequisites for registration:

none

Assesment methods:

The classified credit is in the form of written test; in order to pass the test, student has to acquire at least 56 % points

Learning outcomes of the course unit:

To get the students acknowledged with the common methods of fix and active capital requirements estimation for an industrial project; including the project profitability criteria and the optimum variant selection procedure. The main emphasis is laid on the economic and engineering principles shaping the facility design.

Course contents:

1.	Project elaboration phases (allowance 0/2)
	a. Feasibility study b. Costs appraisal accuracy c. The usual procedure in an investment project proposal
2.	Basic economic terms (allowance 0/2)
	a. Incomes and expenses, revenues and costs, their differences b. Break-even point c. Choosing the appropriate production device considering production costs optimization
3.	Fix and active capital (allowance 0/4)
	a. Direct and indirect capital costs, their further division b. The basic diagram of a capital investment
4.	Methods of capital costs estimation (allowance 0/2)
	a. Fast methods b. Index methods c. Factor - based methods; methods based on one or more factors (Lang, Baumann, Woods) d. Method of functional entities e. Exponential method f. Differences in cost estimation in a grass root project; a project to be realized within "battery limit" and a project of existing production unit revamp
5.	Fix costs estimation (allowance 0/2)
	a. A particular example of fix costs estimation in a distillation unit production capacity increase; including a chemical engineering analysis
6.	Active capital (allowance 0/2)
	a. Active capital circulation b. Methods of active capital evaluation c. Splitting of production costs
7.	Estimation of total capital investment costs (allowance 0/2)
	a. Complex estimation of fix and active capital requirements for a methanol absorption process
8.	Economic point of view in construction material selection (allowance 0/2)
9.	Depreciation (allowance 0/2)
	a. Depreciation types b. Simple methods of investment project evaluation, simple pay back period
10.	Time value of money (allowance 0/2)
	a. Interest rate, ways of interest rate assignment b. Inflation rate and its impact on time value of money
11.	Cash flow (allowance 0/2)
	a. Cash flow diagram
12.	Modern methods of an investment project evaluation (allowance 0/2)
	a. NPV b. NPVR c. IRR d. DCFRR

Recommended or required reading:

Basic:

• PETERS, M S. – TIMMERHAUS, K D. Plant Design and Economics for Chemical Engineers. New York : McGraw-Hill, 1991. 910 s. ISBN 0-07-100871-3.

Language of instruction:

Slovak, English

Assessed students in total:

1

A 0 %

B 0 %

C 100 %

D 0 %

E 0 %

FX 0 %

Course supervisor:

doc. Ing. Otto Mierka, CSc.

Last modification:

19. 9. 2019

AIS: 2019/2020   2018/2019   2017/2018