The definitive study for a sulphuric acid plant that is to be commissioned at end-December 2024 has a capital commitment of $185 million (in Dec 2024 dollars). That plant is designed to produce 30,000 tonnes per annum of H2SO4. I am pricing a H2SO4 plant to produce 25,000 tonnes per annum in my Dec 2022 study. CPI forecasts suggest that the inflation rate over the next two years will be 2.1% per annum. Using the 6/tenths rule, calculate the approximate capital cost of the 25,000tpa plant in Dec 2022 money terms.
The definitive study for a sulphuric acid plant that is to be commissioned at end-December 2024 has a capital commitment of $185 million (in Dec 2024 dollars). That plant is designed to produce 30,000 tonnes per annum of H2SO4. I am pricing a H2SO4 plant to produce 25,000 tonnes per annum in my Dec 2022 study. CPI forecasts suggest that the inflation rate over the next two years will be 2.1% per annum. Using the 6/tenths rule, calculate the approximate capital cost of the 25,000tpa plant in Dec 2022 money terms.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
- The definitive study for a sulphuric acid plant that is to be commissioned at end-December 2024 has a capital commitment of $185 million (in Dec 2024 dollars). That plant is designed to produce 30,000 tonnes per annum of H2SO4. I am pricing a H2SO4 plant to produce 25,000 tonnes per annum in my Dec 2022 study. CPI
forecasts suggest that the inflation rate over the next two years will be 2.1% per annum. Using the 6/tenths rule, calculate the approximate capital cost of the 25,000tpa plant in Dec 2022 money terms.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education