Course unit code:
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:
Recommended semester:
Automation and Information Engineering in Chemistry and Food Industry – master (full-time, attendance method), 3. semester
Level of study:
Prerequisites for registration:
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
c. IRR

Recommended or required reading:
  • PETERS, M S. – TIMMERHAUS, K D. Plant Design and Economics for Chemical Engineers. New York : McGraw-Hill, 1991. 910 p. ISBN 0-07-100871-3.
Language of instruction:
Slovak, English
Assessed students in total:

A 0 %

B 0 %

C 100 %

D 0 %

E 0 %

FX 0 %

Course supervisor:
doc. Ing. Otto Mierka, CSc.
Last modification:
16. 1. 2018

Department of Chemical and Biochemical Engineering

AIS: 2017/2018  

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