SlideShare a Scribd company logo
Purchase Cost of
Miscellaneous Equipment
Dr. K. Shahzad Baig
Memorial University of Newfoundland (MUN) Canada
Indirect costs
The indirect costs are estimated as a function of the direct costs.
1. Design and engineering costs
cost of design and the cost of
“engineering” the plant:
purchasing, procurement
and construction supervision.
20 -30 % of
the direct capital costs.
2. Contractor’s fees
5-10 % of
direct capital cost
3. Contingency allowance
labour disputes,
design errors,
adverse weather
5 -10 % of
of the direct costs.
Total physical plant cost = (PPC)
Purchase cost of miscellaneous equipment
Following books were used in preparation of notes
 Blank, L., Tarquin. A. 2005. Engineering Economy. 6th Edition, McGraw-Hill.
 Eschenbach, T. G. 2003. Engineering Economy”, 2nd Edition, Oxford University Press
 Riggs, J. L., Bedworth, D. D., Randhawa, S. U. 1996. Engineering Economics”, 4th Edition, Tata McGraw-Hill.
 Riggs, J. L., West. T. M. 1986. Essentials of Engineering Economics”, 2nd Edition, McGraw-Hill.
 Peter, M. S., Timmerhaus, K. D. 1991. Plant Design and Economics for Chemical Engineers. 4th Edition, McGraw-Hill.

More Related Content

More from K. Shahzad Baig

More from K. Shahzad Baig (20)

Mass Transfer Equipment Cost
Mass Transfer Equipment CostMass Transfer Equipment Cost
Mass Transfer Equipment Cost
 
HEAT-TRANSFER EQUIPMENT COSTS
HEAT-TRANSFER EQUIPMENT COSTSHEAT-TRANSFER EQUIPMENT COSTS
HEAT-TRANSFER EQUIPMENT COSTS
 
Gross Profit, Net Profit
Gross Profit, Net ProfitGross Profit, Net Profit
Gross Profit, Net Profit
 
Manufacturing Costs
Manufacturing Costs Manufacturing Costs
Manufacturing Costs
 
Capital Investment
Capital InvestmentCapital Investment
Capital Investment
 
Cost Indices for Industrial Application
Cost Indices for Industrial ApplicationCost Indices for Industrial Application
Cost Indices for Industrial Application
 
Estimation of Capital Investments
Estimation of Capital  Investments Estimation of Capital  Investments
Estimation of Capital Investments
 
Production Costs
Production CostsProduction Costs
Production Costs
 
Location of an industry
Location of an industryLocation of an industry
Location of an industry
 
Fluctuation of money value with time
Fluctuation of money value with timeFluctuation of money value with time
Fluctuation of money value with time
 
Economics for Engineers, Why ?
Economics for Engineers, Why ?Economics for Engineers, Why ?
Economics for Engineers, Why ?
 
Psychrometric chart, How to read
Psychrometric chart, How to readPsychrometric chart, How to read
Psychrometric chart, How to read
 
The Scientific Methods
The Scientific MethodsThe Scientific Methods
The Scientific Methods
 
The Nuclear Atom
The Nuclear Atom The Nuclear Atom
The Nuclear Atom
 
The mole and chemical compounds
The mole and chemical compounds The mole and chemical compounds
The mole and chemical compounds
 
The mole and Avogadro
The mole and Avogadro The mole and Avogadro
The mole and Avogadro
 
The indivisible atom
The indivisible atomThe indivisible atom
The indivisible atom
 
Chemical Reaction Stoichiometry
Chemical Reaction Stoichiometry Chemical Reaction Stoichiometry
Chemical Reaction Stoichiometry
 
Chemical Reaction Analysis
Chemical Reaction Analysis Chemical Reaction Analysis
Chemical Reaction Analysis
 
Pressure volume work
Pressure volume work Pressure volume work
Pressure volume work
 

Recently uploaded

The basics of sentences session 4pptx.pptx
The basics of sentences session 4pptx.pptxThe basics of sentences session 4pptx.pptx
The basics of sentences session 4pptx.pptx
heathfieldcps1
 

Recently uploaded (20)

Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXXPhrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
Phrasal Verbs.XXXXXXXXXXXXXXXXXXXXXXXXXX
 
The Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve ThomasonThe Art Pastor's Guide to Sabbath | Steve Thomason
The Art Pastor's Guide to Sabbath | Steve Thomason
 
How to the fix Attribute Error in odoo 17
How to the fix Attribute Error in odoo 17How to the fix Attribute Error in odoo 17
How to the fix Attribute Error in odoo 17
 
The Benefits and Challenges of Open Educational Resources
The Benefits and Challenges of Open Educational ResourcesThe Benefits and Challenges of Open Educational Resources
The Benefits and Challenges of Open Educational Resources
 
2024_Student Session 2_ Set Plan Preparation.pptx
2024_Student Session 2_ Set Plan Preparation.pptx2024_Student Session 2_ Set Plan Preparation.pptx
2024_Student Session 2_ Set Plan Preparation.pptx
 
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
GIÁO ÁN DẠY THÊM (KẾ HOẠCH BÀI BUỔI 2) - TIẾNG ANH 8 GLOBAL SUCCESS (2 CỘT) N...
 
An Overview of the Odoo 17 Discuss App.pptx
An Overview of the Odoo 17 Discuss App.pptxAn Overview of the Odoo 17 Discuss App.pptx
An Overview of the Odoo 17 Discuss App.pptx
 
Benefits and Challenges of Using Open Educational Resources
Benefits and Challenges of Using Open Educational ResourcesBenefits and Challenges of Using Open Educational Resources
Benefits and Challenges of Using Open Educational Resources
 
Morse OER Some Benefits and Challenges.pptx
Morse OER Some Benefits and Challenges.pptxMorse OER Some Benefits and Challenges.pptx
Morse OER Some Benefits and Challenges.pptx
 
Basic phrases for greeting and assisting costumers
Basic phrases for greeting and assisting costumersBasic phrases for greeting and assisting costumers
Basic phrases for greeting and assisting costumers
 
[GDSC YCCE] Build with AI Online Presentation
[GDSC YCCE] Build with AI Online Presentation[GDSC YCCE] Build with AI Online Presentation
[GDSC YCCE] Build with AI Online Presentation
 
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdfDanh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
Danh sách HSG Bộ môn cấp trường - Cấp THPT.pdf
 
The basics of sentences session 4pptx.pptx
The basics of sentences session 4pptx.pptxThe basics of sentences session 4pptx.pptx
The basics of sentences session 4pptx.pptx
 
The impact of social media on mental health and well-being has been a topic o...
The impact of social media on mental health and well-being has been a topic o...The impact of social media on mental health and well-being has been a topic o...
The impact of social media on mental health and well-being has been a topic o...
 
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
UNIT – IV_PCI Complaints: Complaints and evaluation of complaints, Handling o...
 
Basic_QTL_Marker-assisted_Selection_Sourabh.ppt
Basic_QTL_Marker-assisted_Selection_Sourabh.pptBasic_QTL_Marker-assisted_Selection_Sourabh.ppt
Basic_QTL_Marker-assisted_Selection_Sourabh.ppt
 
slides CapTechTalks Webinar May 2024 Alexander Perry.pptx
slides CapTechTalks Webinar May 2024 Alexander Perry.pptxslides CapTechTalks Webinar May 2024 Alexander Perry.pptx
slides CapTechTalks Webinar May 2024 Alexander Perry.pptx
 
Pragya Champions Chalice 2024 Prelims & Finals Q/A set, General Quiz
Pragya Champions Chalice 2024 Prelims & Finals Q/A set, General QuizPragya Champions Chalice 2024 Prelims & Finals Q/A set, General Quiz
Pragya Champions Chalice 2024 Prelims & Finals Q/A set, General Quiz
 
Advances in production technology of Grapes.pdf
Advances in production technology of Grapes.pdfAdvances in production technology of Grapes.pdf
Advances in production technology of Grapes.pdf
 
How to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS ModuleHow to Split Bills in the Odoo 17 POS Module
How to Split Bills in the Odoo 17 POS Module
 

Purchase Cost of Miscellaneous Equipment

  • 1. Purchase Cost of Miscellaneous Equipment Dr. K. Shahzad Baig Memorial University of Newfoundland (MUN) Canada
  • 2. Indirect costs The indirect costs are estimated as a function of the direct costs. 1. Design and engineering costs cost of design and the cost of “engineering” the plant: purchasing, procurement and construction supervision. 20 -30 % of the direct capital costs. 2. Contractor’s fees 5-10 % of direct capital cost 3. Contingency allowance labour disputes, design errors, adverse weather 5 -10 % of of the direct costs.
  • 3. Total physical plant cost = (PPC)
  • 4. Purchase cost of miscellaneous equipment
  • 5.
  • 6.
  • 7.
  • 8. Following books were used in preparation of notes  Blank, L., Tarquin. A. 2005. Engineering Economy. 6th Edition, McGraw-Hill.  Eschenbach, T. G. 2003. Engineering Economy”, 2nd Edition, Oxford University Press  Riggs, J. L., Bedworth, D. D., Randhawa, S. U. 1996. Engineering Economics”, 4th Edition, Tata McGraw-Hill.  Riggs, J. L., West. T. M. 1986. Essentials of Engineering Economics”, 2nd Edition, McGraw-Hill.  Peter, M. S., Timmerhaus, K. D. 1991. Plant Design and Economics for Chemical Engineers. 4th Edition, McGraw-Hill.