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Engineering Economic Analysis for Waste Heat Boilers: a Case of an Integrated Petrochemical Complex in Malaysia

Ghazali, Zulkipli and Abd Majid, Mohd Amin and Hong, Fun How (2011) Engineering Economic Analysis for Waste Heat Boilers: a Case of an Integrated Petrochemical Complex in Malaysia. IEEE Colloquium on Humanities, Science and Engineering Research 2011 .

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Abstract

Abstract— The paper analyzes the economic justification of an investment proposal for two units of waste heat boilers (WHBs) to replace existing two units in an integrated petrochemical complex in Malaysia. The WHBs have a number of operational and technical advantages. However, due to the huge capital investment, economic justification is primary in deciding the feasibility of this undertaking. The engineering economy analysis model employed includes net present worth, payback period, rate of return, investment balance analysis, sensitivity analysis, and after-tax economic analysis. Four factors namely initial investment, operating costs, annual demand, and salvage value were analyzed to determine their impact on the overall economics of the investment proposal. The analysis highlights a satisfactory return on investment. The overall project is quite sensitive to the variation in demand of the medium pressure steam. However, it is impervious to the variation in the other three factors considered initial investment, operating costs and salvage value. The after-tax net present worth and rate of return further support the economic justification of the proposal. Keywords- waste heat boilers;payback period; present worth analysis; rate of return; investment balance; sensitivity analysis; after-tax economic analysis; Malaysia

Item Type:Article
Subjects:H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments / MOR / COE:Departments > Management & Humanities
ID Code:7152
Deposited By: Dr Zulkipli Ghazali
Deposited On:12 Dec 2011 07:25
Last Modified:19 Jan 2017 08:22

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