CHEN4016 Deferred Exam Sem 2 2020 PDF

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Summary

Process Economics question paper...

Description

Further and Deferred Assessment Period, Semester 2, 2020

CHEN4016 Process Economics and Management

WASM: Minerals, Energy and Chemical Engineering FINAL EXAMINATION - RESTRICTED BOOK Further and Deferred Assessment Period, Semester 2, 2020

CHEN4016 Process Economics and Management This paper is for Bentley/Kalgoorlie Campus students

Assessment Duration

175 minutes

This includes time for: reading, writing/typing, technology setup, scanning and upload. Total assessment marks

37

Instructions to Students Permitted to Access: □ □ □ □ □ □ □

Student laptop/PC (no iPad or other smart devices allowed) Textbook (hard copy and soft copy) A non-programmable approved calculator Mobile phone with scanning app (only during scanning time) Outlook or email account (only during uploading time) All lecture materials and Excel spreadsheet template available on BB are permitted Restricted websites: ALL (you may only access the unit’s Blackboard site)

Answers via: □

□

Hand-written on white sheets of paper (supplied by student) – scan and email/file transfer to PC. Hand-written answers must be scanned and converted into PDF. The app Camscanner is recommended for scanning. Type into Excel

Submission of Answers: □

Submit SINGLE file (word/pdf) into Turnitin: Blackboard/Deferred Exam/Exam Submission

Calculations: □ □

Student-supplied calculator Excel

Questions to answer: □

Answer ALL questions

Queries during assessment: Unit Coordinator: Hussein Znad □

Via email: [email protected] Page 1 of 3

Further and Deferred Assessment Period, Semester 2, 2020

CHEN4016 Process Economics and Management

QUESTION 1

(15 marks)

A petroleum refinery processing 1.5 million barrels of crude oil per annum at a processing cost of $10.00 real per barrel. The remaining life for this refinery is 5 years, with a 30% current corporate tax rate. We could construct a new refinery in a special economic zone where the corporate income tax rate is 10% to process the remaining 5 years of throughput at a processing cost of $6.50 real per barrel. This new refinery will require a capital expenditure of $25.0 million (real), which can be fully depreciated on a straight line basis over the remaining 5 years. Under this scenario, the old refinery can be salvaged for $5.0 million (real) to offset a portion of the capital expenditure in year 0. Inflation is expected to be 1.8%, the pre-tax risk free rate of return is currently 1.5%, and the return on the market portfolio is 6%. If our company has a historical beta of 1.8, a current debt to capital ratio of 0.5 and our borrowing is at LIBOR + 150 basis points (LIBOR is currently 2.0%), should we build the new refinery if our target debt to capital ratio is 0.65? By how much would this project increase/decrease the value of the firm? (Note: The model can be built in either Nominal or Real dollars)

QUESTION 2

(10 marks)

A decision has been taken to supply a giant power generator for the facility. Due to the project schedule, the generator must be in the site in 50 days from today; otherwise, it delays the whole project and cost 50,000 AUD for each day after the day 50. You have two options for transportation: 1- Air transportation - they can deliver the cargo in 10 days, with the cost of 250,000 AUD. there is a probability of 10% for a 45 days delay due to unexpected technical problems. 2- Marine transportation, takes 43 days, costs 90,000 AUD. There is 40% probability of 17 days delay.

a) Draw a decision tree, show decision nodes chance nodes and outcome nodes to work out the solution.

(5 Marks)

b) Calculate the expected monetary Value (EMV) for the decision nodes. c) As a project manager, which option would you choose and why?

Page 2 of 3

(4 marks) ( 1 Marks)

Further and Deferred Assessment Period, Semester 2, 2020

CHEN4016 Process Economics and Management

QUESTION 3

(6 marks)

Use any examples of your choice, discuss how a chemical engineer can have impact on a business that is on the plant operation?

QUESTION 4

(6 marks)

A chemical-processing firm started the year with total assets of $80,000. It has current assets of $60,000 and current liabilities of $30,000. During the year the business recorded $100,000 in revenues, $55,000 in expenses. Calculate the profit margin, current ratio and return on assets (ROA).

END OF EXAMINATION

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