4.Economic details are set out below for the manufacture of several grades of sa

4.Economic details are set out below for the
manufacture of several grades of same chemical. Higher purities command a
premium price but costs are higher.Which alternative
would you choose? Why? im= 0.2DCFRR criterion is
to be used!
ProcessItem
1 2Purity
95
99.5Plant capacity
(t/yr)
4000 4000Product value
($/ton of product)
150
190Capital cost
($/1000)
600 900Raw material ($/t
product)
50 50Energy cost ($/t
product)
15 25Labor cost ($)
16000 25000Maintenance
10% of capitalOverhead ($)
40000 50000Salvage value
40000 100000Plant life
8 years
10 yearsWC = 0
tax rate = 0.5Depreciation = S-LStart-up = 0