CEV633 – Engineering Economics and Project Management

Project –Task Details

CO2, CO3, PO5, PO12, A1 – A5

You are working in a multi-billion consultant company as a project engineer and are requested by your
manager to form a group (4 members) and find any potential project as well as do engineering
economic and profitability analysis for the project. You are required to evaluate and perform the
analysis by using CAPCOST software. Your group should submit the paperwork report by Thursday
13th June 2019 (5.00pm). Late submission will result in deduction of the marks (1 day late -20%, 2
days late -50%, 3 days late on onwards -100%)

The group and members as well as the projects have been assigned as per Table 1 (will be given by
the respective lecturer). Each group should also find out the details (amount of production/sales,
Process Flow Diagram (PFD), material, equipment, etc.) of the processes involved from any kind of
available resources (book, journal, website, magazine, report, etc.).

The projects are the production of:

1. Butadiene
2. Ethylene
3. Propylene
4. Benzene
5. Ammonia
6. Styrene
7. Hydrofluoric acid

The title of the project should be “The economic and profitability analysis for the production of
_______?__________with a capacity of ________?______ tonne/year”.

Other details of the project are as per below:

Land cost = $10,000,000
Fixed capital investment: 70% at end of year 1, 30% at end of year 2
Start-up at end of year 2
Tax rate = 40%
Depreciation method = Current MACRS over 5 years
Length of time over which profitability is to be assessed = 10 years after start-up
Internal rate of return = 12% p.a.
Salvage value = 10% from the initial value
CEPCI value for year 2019 (assumed) = 605

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 Probable Variation of Key Parameters over Plant Life

***For the other values which is not given, you should do your own assumption (with
reference)

TASK 1 - DESCRIPTION OF THE PROPOSED PROCESS

Your first task is to carry out a literature survey on the assigned project in order to identify the process
steps, potential use of resources, software that will be used (CAPCOST) and also
information/parameters/assumptions that will be used. In the first instance, use the library computer
based catalogue and CD ROM systems. Internet and process encyclopedias may be a useful starting
point.

Outline for literature review

The literature review should identify the main aspects of your proposed project. The review should
cover the following:

 Boundary conditions
 The main unit operations of the process/processes.
 Possible alternatives (e.g. process, energy, infrastructure, materials etc.)
 Process technical information (e.g. pressure, temperature, flows, densities etc.)
 Material and products technical information
 PFDs (process flow diagrams)

TASK 2 – Estimation of Capital Cost

Based on your literature review (TASK 1) and on your project background, you will have to use
Engineering Economic Principles as the first step towards determining the bare module, total module,
and grassroots cost for the project

TASK 3 – Estimation of Manufacturing Cost

Based on TASK 1 and TASK 2, estimate:

 The cost of operating labour (COL)
 The cost of utilities (CUT)
 The cost of manufacturing (COMd)

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TASK 4 – Engineering Economic Analysis

Based on TASK 1, TASK 2 and TASK 3, perform the cash flow analysis:
 Draw a discrete, non-discounted cash flow diagram for this process.
 Determine the yearly depreciation schedule using the five-year MACRS method.
 Determine the after-tax profit for each year.
 Determine the after-tax cash flow for each year.
 Draw a discrete, discounted (to year 0) cash flow diagram for this process.
 Draw a cumulative, discounted (to year 0) cash flow diagram for this process.
 What is the present value (year 0) of this process?

TASK 5 – Profitability Analysis

Based on TASK 1 to TASK 4, perform the profitability analysis:

 Profitability criteria should be presented and include
o Net present value (NPV)
o Discounted cash flow rate of return (DCFROR)
o Discounted Payback period (PBP)
o Cumulative Cash Position
o Rate of Return on Investment (ROROI)
o Payback Period
 The concept of evaluating risk should also be carried out by using Monte-Carlo simulation and you
should be able to explain from the result that you got.

PROJECT REPORT

Your final report must contain TASKS 1 to 5 above. The final report should include material covered
in class as well as other material. The work should focus on a series of engineering economic
calculation and analysis. Work should demonstrate understanding of the engineering economic that
you have learnt in class. It is expected also that your project report will be of high quality.

PROJECT REPORT STRUCTURE

Section Comments

1. Executive Summary  Problem definition

 Study approach and methods
(maximum 2 pages)  Major findings
 Recommendations
 Summary must be concise with interesting and critical
comments
2. Introduction  Description of project
 Objective of study
(maximum 2 pages)  Approach considered in the study

4. Process Description  Task 1 addressed as per project requirements

5. Estimation of Capital Cost  Task 2 addressed as per project requirements
 Task 3 addressed as per project requirements

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6. Estimation of Manufacturing Cost
7. Engineering Economic Analysis
8. Profitability Analysis
(maximum 30 pages)
9. Conclusions and recommendations
(maximum 2 pages)
10. References / Appendices
 Task 4 addressed as per project requirements
 Task 5 addressed as per project requirements
Extra marks will be given for (i) critical analyses, and (ii)
discussion of important issues or alternative solutions and
completeness
 Relevant
 Fully justified
 References
 Calculations
 Additional information
 Relevance of information, maps, plans etc.
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Table 1 Group, Members & Project No. – Group 6A

GROUP ID NAME PROJECT NO.

1 2017485228 NURUL ELIA AQILA BT ABU RAHIM 1
2017474132 AHMAD NABIL ASYRAF BIN MAT TAHA
2017485342 MOHAMMAD NURUL IKMAN BIN MOHAMMAD AZLAM
2017847384 MOHAMAD RIDHWAN BIN BASIR
2017485306 LOVELYNA EVA SUNTA ANAK MICHAEL LUNCHA

2 2017485384 AFFANDY BIN RAHIM 2

2017485314 NUR AISYATULSYAFINA EMIRA BINTI MOHD ASRI
2017485272 JASON ANGKIN ANAK JOHNADY
2017485364 WAN SUHAILAH BINTI WAN MOHAMED FAUZI
2017485332 AMZAMIR NOOR BIN KAMARUL BAHRIN NOOR

3 2017485224 KHAIRUNNISA NABILAH BINTI FAIRUL AZAHAR 3

2017660426 MUHAMMAD BUDRIZ BIN MOHD AMIN
2017469624 MOHAMAD MUBARAK BIN MOHAMAD YAKZAN
2017485242 KAMAL FIQRE BIN MD KAMALUDIN
2016691912 NURUL FATHIAH BINTI WAHI

4 2017463646 MUHAMMAD FARHAN BIN JAMDI 4

2017823514 NAZRIYATUL NAZIHAH ROSLAN
2017485374 MOHD. FADHLAN SHAH BIN HERMANDY
2017485278 HAFIZAH BINTI HAMDIN
2017485232 ABDUL HAKIM MASU'UD BIN FATHI

5 2017485322 RANDY RANDOCK ANAK LAWAT 5

2017429792 JAWIDAH ADIBA BINTI KAMAROLZEMAN
2017610884 NUR ZULAIKHA BINTI ZAINUDIN
2017485428 AMRIL SYAFIQ BIN AHMAD ZABIDI
2017896666 MUHAMMAD FAROUK BIN MUHAMAD

6 2017485318 MAXMILAN BRYAN DAUD 6

2017867282 NUR ZULAIHA ABAS
2017485302 IVY JUNE BONIFACE
2017485362 MUHAMMAD EZAD SHAFIQ BIN MOHD TARMIZI

7 2017485446 AARON MICHAEL 7

2017855606 IMAN ATHIRAH BINTI KHAMIS
2016691856 NUR BATRISYIA BINTI RAZMAN SHAH
2017485248 MUHAMMAD NAZIFF NAJMUDDIN BIN AZLI

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Table 1 Group, Members & Project No. – Group 6D

GROUP ID NAME PROJECT NO.

1 2017485376 KHAIRUNNISA BINTI KHAIRUDIN 1
2017485392 AIDA NADIAH BINTI HAZELI
2017466222 ASHLEY WASLI
2017485414 ROGER FERNANDEZ ANAK MUNI
2017466214 WILSON TUNGKU ANAK SAWANG

2 2017485452 AISYAH SAKINA BINTI SHAHRIN 2

2017485424 NABILAH YASMIN BINTI SHAMSOL AFANDI
2017453676 MUHAMMAD HAFIZ BIN RIDWAN
2016691822 TENGKU NUR NAZIHAH BINTI TENGKU ENDUT
2017272468 IDRIS LUQMAN BIN NUR MUHAMAD FIRDAUS

3 2017485244 NOR AQILAH BINTI MUHAMAD NASIR 3

2017485284 NUR KHALILAH BINTI MOHD TAIB @ HASHIM
2017895896 ANNESTASIA OLLAT ANAK JAMPANG
2017466216 AFFYCILLA ADRIES

4 2017485328 DIYANA NATASHA BINTI DARIMI 4

2017485268 MAISARAH BINTI AHMAD
2017485382 AMIRUDIN FITRI BIN RAMLY
2017485356 SITI SUKHAIRIYAH BINTI SENU
2017485388 SAIFUDDIN BIN ZULKEFLEE

5 2017485404 NASHITA ALIAH FAHIRA BINTI AHMAD FADZIL 5

2017485326 SYAMIL AZIM BIN SAHARUDDIN
2017485252 AUDREY OSONG PATRICK
2017485234 MUHAMMAD SYIMIR BIN AB HAMID
2017485386 SHARIFAH NUR HADZLIN BINTI WAN MADEHI

6 2017485436 ANAS BIN MOHD RASHID 6

2017485246 ABDULLAH RAZIQ BIN MOHD JAMAL
2017485254 SITI AISYAH MUNIRAH BINTI RAZALI
2017479024 ADHWA IZZATI BINTI MD TAIB

7 2017485412 MUHAMMAD BIN ISMAIL 7

2017489628 IQBAL HAKIM BIN HALIM
2017485438 MOHD FIKRI HAKIM BIN ABDULLAH
2017485304 MUHAMMAD HAFIZUDDIN BIN AZMAN

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 RUBRIC PROJECT REPORT

Una cceptable Marginal Acce ptable Exceptional Full Bloom

Criteria Crite ria Outcomes CO Bloom Weightage Points Marks
(0) (1 - 2) (3 - 4) (5-6) Marks Marks

* Minimal evidence of an * Contains an introduction to *Contains an introduction that *Introduction contains

introduction and *Minimal the topic and includes a details a definition, background information and
evidence of any conclusion. definition and/or classification classification and description. details definition,
3 C 0% 0
and/or description and *Contains a summary or classification and description.
*Contains a basic conclusion comment. *Contains a summary and
Structure and Purpose
(does not necessarily make a comment that concludes the
3 P 0% summary or comment). project. 6 10 10 0

Able to discuss clearly in the Introduction and

Identification of Main Issuess/
Problems
Analysis of the Issues or Problems
Comment on Effective
Solutions/Strategies
3 A2 100% 10
Conslusion
Identify and understands few Identify and understand some Identify and understands most Identify and understands all of
3 C 0% of the main issues/problems. of the main issues/problems. of the main issues/problems. the main issues/problems.
0
3 P 0% 6 20 20 0
Able to identify the issues/problems 3 A1 100% 20
Incomplete analysis of the Superficial analysis of some Thorough analysis of the most Insightful and thorough
issues/problems. the issues/problems. issues/problems. *The analysis of all the
*The analysis does not *The analysis considers analysis considers information issues/problems.
consider information from any information from one of these from one of these knowledge *The analysis considers
2 C3 100% of these sources. knowledge sources. *The sources. *The analysis information from all of these 20
*The analysis considers none analysis considers one of considers two of these for the knowledge sources.
of these. these for the perspectives perspectives they recognize. *The analysis considers all
they recognize. three of these for the
perspectives they recognize.
P 0% 6 20 20 0
Able to interpret the data/ideas/findings of the
2 A 0% 0
issues/problems.
Little or no action suggested Supertifical and/or Appropriate, well thought out Well documented, reasoned
and/or inappropriate inappropriate comments about and pedagogically appriopriate
Able to suggest an appropriate solutions or solutions/strategies to all of solutions/strategies to some solutions/strategies or comments on the
3 C 0% the issues/problems. of the issues/problems. proposals for solutions/strategies to all 0
strategies on the issues or problems.
solutions/strategies t most of issues/problems.
the issues/problems.

3 P 0% 6 25 25 0
Able to propose the solutions/strategies 3 A5 100% 25
Not relate to any Relate to limited Relate to some of Relate to excellent
3 C 0% data/theories/findings from data/theories/findings from data/theories/findings from data/theories/findings from 0
researches/references or etc. researches/references or etc. researches/references or etc. researches/references or etc
with clearly documented links.
Additional Sources or Re ferences 3 P 0% 6 10 10 0
Able to locate data/theories/findings from
researches/references and etc on the issues 3 A1 100% 10
or problems.
Had three or more of the Had two of the following Had one of the following The project study organization
following limitations: limitations: limitations: was:
3 C 0% *Organization was not logical, *Organization was not logical, *Organization was not logical, *Easy to follow,
0
*Information was not *Information was not *Information was not *Presented in a logical
consistently integrated consistently integrated consistently integrated manner,
Organisation together and together and together and *Integrated information and
3 P 0% *Information was not *Information was not *Information was not *Summarized information 6 5 5 0
summarized when needed. summarized when needed. summarized when needed. when needed.
Able to arrange data logically and consistently 3 A4 100% 5

Writing is affected by all the
3 C 0% following limitations:
*Redundant phrasing, *Run-on
3 P 0% sentences and *Incorrect use
Language Feature and Writing of vocabulary.
Style * Minimal evidence of
Able to demonstrate a good language feature
technical and evaluative
(vocubulary and evaluative language) and 3 A3 100%
languages.
writing style in the report.
Writing is affected by two of
the following limitations:
*Redundant phrasing, *Run-on
sentences and *Incorrect use
of vocabulary.
*Attemp to used technical and
evaluative languages.
Writing is affected by one of
the following limitations:
*Redundant phrasing, *Run-on
sentences and *Incorrect use
of vocabulary.
*Uses technical and evaluative
languages.
The style of writing is:
*Professional, *Easy to 0
understand and *Uses
appropriate vocabulary. 6 5 5 0
*Uses a variety of technical
language and uses evaluative
language to develop their
sentences or informations. 5

*No use of paragraphing & * Paragraphs have incorrect *Writing is organized into
3 C 0% *Some meaning can be structure, paragraphs that develop an *Writing is organized into 0
determined. *Most simple and compound idea. paragraphs that contain a
3 P 0% *Few conventional spelling. sentences are correct and *Correct spelling of some topic sentence, developing 6 5 5 0
meaning is mosty clear. simple, common and more sentences and a linking
Grammar
* Correct spelling of most difficult words. sentences.
Able to demonstrate an organized paragraph simple and common words. *Correct spelling of some
and minimal incorrect spelling in the report.
3 A3 100% simple, common and some 5
difficult words.

Overall Performa nce Una cceptable Marginal Acceptable Exceptional 100 100 100

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