Central Quality Office Rev:02 26th March 2013 1 F/QAP/021/001 Caledonian College of Engineering Course Work Name of the programme BSc (VITU) Name of Module with Code ENGINEERING ECONOMICS (ENMG403) Name of the Module Leader/Tutor Mr.Haris Kadir Mohammed/Asst.Prof. Abraham Debebe Coursework Type Case Study Assessment weightage 50% Date of submission 9th November 2016 Aim To develop an understanding of evaluating the economic viability of projects in process industries. Objective  to understand the concepts and methods of economic evaluation  to prepare cost estimation, financial statements and cash flow for industrial operation. General Instructions: This coursework aims to develop an understanding of evaluating the economic viability of projects in process industries. The students are presented with a case study related to an industrial investment scenario. The case study requires the students to make wise judgements in uncertain situations, and to propose and select from multiple possible options with proper justifications. Each student is expected to prepare a separate project feasibility report based upon their inferences and to report the same in a standard format. The report is expected to be free from grammatical errors and should be organized well. Assessment Methodology: The assessment for this coursework is based on the feasibility and viability analysis of the given project and the structured reporting of the same. The feasibility analysis carries 90% of the assessment while the remaining 10% comes from the structuring of the report. The detailed breakdown of marks for each assessment is shown under marking scheme.Central Quality Office Rev:02 26th March 2013 2 F/QAP/021/001 Marking scheme Sl No Details of assessment Max. marks 1 Identification of the major equipment required for starting up a chemical plant. 20% 2 Determination of the start-up capital for the project. 25% 3 Estimation of the total production cost 25% 4 Assessing the Rate of Return (RoR) of the project 20% 5 Completeness of the project report and proper reporting of the key financial factors 10% Total marks 100% Please note all assignments shall subject to plagiarism software checks, "TURNITIN". Plagiarism It is important to understand what plagiarism is and how it can be avoided. "Unacknowledged copying from published sources (including the internet) or incomplete referencing". The following also constitute plagiarism: • Copying sections of work from a friend/colleague. • Having a friend/family member dictate something to you. • Copying and pasting from the internet without citing the source. • Copying directly from a study text quotation without citing the source. Quotations When using quotations from books, websites or journal articles you should cite the author and the year of publication then use the quote in quotation marks. Paraphrasing Paraphrasing is where you encapsulate another person's original idea, argument or conclusion in your own words. It is still necessary to attribute those ideas to the author, and you can do this by using the formatting outlined above for direct quotations, taking care to include the author's surname and the year of publication. Collaboration We acknowledge that you may undertake joint study with colleagues or as part of a formal training programme. However, working with another person to write assignments is not acceptable. Your answers must be your own and in your own words.Central Quality Office Rev:02 26th March 2013 3 F/QAP/021/001 Referencing Harvard Referencing (CCE Style) First Edition 2013 should be followed for both in-text and listing references. This downloadable document can be found in our CCE portal at: http://portal.cce.edu.om/member/contentdetails.aspx?cid=628 Instructions 1. Plagiarism is a serious offence. In case of any plagiarism detected, penalty will be imposed leading to zero mark. 2. Course work and reports should be solved by the individual/group. 3. Course work and reports should be submitted on time and submission after deadline will be marked zero. 4. Course work should be submitted with an appropriate cover page, which can be obtained from the departmental assistant at the department. 5. Name, student identification and title of the course work to be written clearly and legibly on the cover page. 6. The completed course work is to be submitted to the departmental assistant on or before the deadline and record your name, date of submission and signature in the book with the departmental assistant. Grading of Course work BSc (VITU) Programme Excellent Contribution 80% and above Very Good Contribution 70%-79% Good Contribution 60%-69% Satisfactory Contribution 50%-59% Inadequate Contribution 40%-49% Not meeting the outcomes Less than 40% Name and Signature of Module leader ------------------------------------------------- Date:Central Quality Office Rev:02 26th March 2013 4 F/QAP/021/001 CASE STUDY Background of the problem The demand for ammonia is on the increase. Emerging countries especially India and China are looking forward to become self-sufficient in terms of food production, and are seeking to produce more ammonia based fertilizers. The global demand for ammonia has increased from 96 million tons in 2000 to 120 million in 2011 and it is expected to grow further to reach the level of 160 million in 2020 (Source: Ammonia Global Market to 2020 - Food Security Concerns Driving Demand for Ammonia-Based Fertilizers, 2013). Dhofar Fertilizers Company, a fertilizer manufacturing unit located in Sohar, has plans to capitalize on this business opportunity by investing on a new ammonia plant. Mr.Mohammed Al Farsi, the production manager, has been given the task to prepare a cost estimation and feasibility study for this product. As a chemical engineer working in the company you were delegated with this task. Prepare a comprehensive project report to assess the economic viability of the project. Tasks 1. Prepare a list of the major equipment required to start an ammonia plant having an annual production capacity of 250,000 tonnes per year. (20 Marks) 2. Based on the purchased equipment cost, prepare a study estimate of the ammonia plant (with an accuracy of ± 30 percent). a. Determine the Fixed Capital Investment (FCI) (15 Marks) b. Determine the Working Capital Investment (WCI) (05 Marks) c. Determine the Total Capital Investment (TCI) (05 Marks) 3. Estimated the total production cost (TPC) per tonne of ammonia. (25 Marks) 4. Determine the Rate of Return (ROR) the project. Comment on whether this RoR is justifiable to undertake the project. . (20 Marks) 5. Prepare a project feasibility report, which contains all of the above information laid out in a standard feasibility report format. (10 Marks)Central Quality Office Rev:02 26th March 2013 5 F/QAP/021/001 Additional Notes: 1. Assume any insufficient data needed for calculation. 2. If recent cost data is not available the cost could be determined using appropriate cost indices/scaling factors. 3. The project feasibility report should contain all of the above information and should follow a standard report structure.