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.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.