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Plant Design & Economics
Profitability Analysis
GATE 2012
Hard

Heat integration is planned in a process plant at an investment Rs. 2×10⁶. This would result in a net energy savings of 20 GJ per year. If the nominal rate of interest is 15% and the plant life is 3 years, then the breakeven cost of energy, in Rs. per GJ (adjusted to the nearest hundred), is

  • A33500
  • 43800
  • C54200
  • D65400

Explanation

Capital Recovery Factor CRF=i(1+i)ⁿ/[(1+i)ⁿ−1], with i=0.15, n=3: (1.15)³=1.5209, CRF=0.15×1.5209/0.5209≈0.4380. Annualized investment cost=2×10⁶×0.4380=876,000 Rs/yr. Breakeven energy cost=876,000/20≈43,800 Rs/GJ.

Source: GATE CH 2012 (2012)

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