TABLE OF CONTENTS James R. Couper, D.Sc. Professor Emeritus, The Ralph E. Martin Department of Chemical Engineering, University of Arkansas Fayetteville (Section Editor)
Darryl W. Hertz, B.S. Manager, Front-End Loading and Value-Improving Practices Group, KBR (Front-End Loading, Value-Improving Practices)
(Francis) Lee Smith, Ph.D., M.Eng. Principal, Wilcrest Consulting Associates, Houston, Texas (Front-End Loading, Value-Improving Practices)
| GENERAL COMMENTS | ||
| ACCOUNTING AND FINANCIAL CONSIDERATIONS | ||
| Principles of Accounting | 9-4 | |
| Financial Statements | 9-5 | |
| Balance Sheet | 9-5 | |
| Income Statement | 9-6 | |
| Accumulated Retained Earnings | 9-6 | |
| Concluding Remarks | 9-6 | |
| Other Financial Terms | 9-6 | |
| Financial Ratios | 9-7 | |
| Relationship Between Balance Sheets and Income Statements | 9-7 | |
| Financing Assets by Debt and/or Equity | 9-7 | |
| Cost of Capital | 9-9 | |
| Working Capital | 9-9 | |
| Inventory Evaluation and Cost Control | 9-9 | |
| Budgets and Cost Control | 9-10 | |
| CAPITAL COST ESTIMATION | ||
| Total Capital Investment | 9-10 | |
| Land | 9-10 | |
| Fixed Capital Investment | 9-10 | |
| Example 1: Use of Cost Index | 9-13 | |
| Example 2: Inflation | 9-13 | |
| Example 3: Equipment Sizing and Costing | 9-13 | |
| Estimation of Fixed Capital Investment | 9-13 | |
| Example 4: Seven-Tenths Rule | 9-14 | |
| Example 5: Fixed Capital Investment Using the Lang, Hand, and Wroth Methods | 9-14 | |
| Comments on Significant Cost Items | 9-16 | |
| Computerized Cost Estimation | 9-17 | |
| Contingency | 9-17 | |
| Offsite Capital | 9-17 | |
| Allocated Capital | 9-17 | |
| Working Capital | 9-17 | |
| Start-up Expenses | 9-17 | |
| Other Capital Items | 9-17 | |
| MANUFACTURING-OPERATING EXPENSES | ||
| Raw Material Expense | 9-18 | |
| Direct Expenses | 9-18 | |
| Utilities | 9-18 | |
| Operating Labor | 9-18 | |
| Supervision | 9-18 | |
| Payroll Charges | 9-18 | |
| Maintenance | 9-18 | |
| Miscellaneous Direct Expenses |
