7. Basic Technical Terms
• Capital Investment
• Annual Income
• Annual Cost
• Interest Rate
• Rate of Return
– Rate of Return = x 100% (simple Method)
• Pay Back Period
– Pay Back Period = / (simple Method)
• Investment Life
• Salvage Value
7
10. Future Worth factor, FWF = (1+i)n
F = P(1 + i)n F
0 1 2 n
• F = Future value
• P = Present value P i +
•
money
i = Compound Interest Rate time
• n = Number of Year -
Excel Function:
Equation: F = P(1 + i)n
@FV(i, n, A, Pv, type)
Rate Interest Rate, i
Notation: F = P(F/P, i, n) Nper Peroid, n
Pmt Equal amount per peroid, A
Pv Present Value, F
type 0 : at end of peroid
1 : at beginning of peroid
10
11. Example 5 4.5
% ,
F
0 1 2 n
P i
P
n
i
Future Worth Factor, FWF ( +i)^n
,F P x FWF
11
12. Present Worth factor, PWF = 1/(1 + i)n
F
P = F/(1 + i)n
0 1 2 n
• F = Future value
i +
• P = Present value P
money
time
• i = Compound Interest Rate -
• n = Number of Year
Excel Function
PV(Rate, Nper, Pmt, Fv, type)
Rate Interest Rate, i
Equation: F = P(1 + i)n
Nper Peroid, n
Notation: F = P(F/P, i, n) Pmt Equal amount per peroid, A
Fv Future Value, F
type 0 : at end of peroid
1 : at beginning of peroid
12
13. Uniform Annual Series Present Worth factor, SPWF
n n
1 (1 i) 1 (1 i )
SPWF P A
i i
Notation: P= A(P/A, i, n) A A A A A
0
• P = Present value 1 2 n
• A = Annual value i
P
• i = Compound Interest Rate Excel Function
• n = Number of Year PV(Rate, Nper, Pmt . type)
Rate Interest Rate, i
Nper Peroid, n
Pmt Equal amount per peroid, A
type 0 : at end of peroid
1 : at beginning of peroid
13
14. Break Even Point Method
•
•
Simple Pay Back Period = First Investment Cost
Annual Benefit
•
(Accumulation Cash Flow)
14
20. Condenser Cost Optimization
• Condenser Design:
• For a given heat load:
– Vary tube dia. And water velocity give different
condenser area and pumping power.
– High water velocity Less condenser area Less
investment cost.
– High water velocity More pump power required
Higher operating cost.
• Optimum economic cost must evaluate over the
“condenser life” using “Net present value, NPV
method”.
20
22. Example of 1 MW power plant
condenser design
Tube Water Tube Length , Pump Surface
Diameter velocity Number of tubes per pass U L Power area
2 2
mm. m/s N W/m K ( m. ) W m
1.568 506 3565 0.933 2313 44.48
1.743 448 3837 0.989 2511 41.80
15
2.240 349 4034 1.210 3250 39.76
2.614 314 4265 1.271 3642 37.61
1.513 363 3394 1.138 2264 46.75
1.816 303 3741 1.252 2560 42.90
18
2.096 260 3979 1.374 2944 40.33
2.725 202 4433 1.585 3940 36.20
1.458 249 3505 1.315 2187 45.28
1.823 199 3786 1.521 2541 41.91
22
2.026 179 3969 1.612 2776 39.98
2.431 150 4115 1.866 3425 38.56
22
23. Economics Design Conditions
• Condenser Life: 15 years.
• Salvage value = 2% of condenser cost
• Operating hour: 8,000 hr/y
• Interest rate: 6% per year
• Electrical Cost: 3 Baht/kWh
• Maintenance Cost: 5%(of Condenser Cost) per
year
• Condenser cost, C = m + nA Baht
m = 150,000 Baht
n = 23,520 Baht/m2
A = condenser surface area, m2
23
24. Parameter Symbol Calculation Value Unit
Condenser Life Assume 10 years
Operating hour Assume 8000 hr/y
Salvage value Assume 5 % of condenser cost
Interest rate Assume 7 % per year
Electrical Cost Assume 3.2 Baht/kWh
%(of Condenser Cost) per
Maintenance Cost Assume 4.5 year
m Assume 150000 Baht
n Assume 23,520 Baht/m2
Condenser cost
C C = m + nA Baht
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25. Assignment
Using Net Present Value (NPV)
1. Select 1 case to calculate NPV by yearly cash
flow method.
2. From yours calculation results of the
“Condenser design”, determine the most
economically deign.
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