%P 311-316
%C Penang
%A Z. Ghazali
%A M.A. Abd Majid
%A H.F. How
%T Engineering economic analysis for waste heat boilers: A case of an integrated petrochemical complex in Malaysia
%R 10.1109/CHUSER.2011.6163740
%D 2011
%J 2011 IEEE Colloquium on Humanities, Science and Engineering, CHUSER 2011
%L scholars1528
%O cited By 0; Conference of 2011 IEEE Colloquium on Humanities, Science and Engineering, CHUSER 2011 ; Conference Date: 5 December 2011 Through 6 December 2011; Conference Code:89137
%X 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. © 2011 IEEE.
%K Balance analysis; Capital investment; Economic justification; Engineering economic analysis; Engineering economy; Investment proposals; Malaysia; Medium pressure; Net present; payback period; Payback periods; Petrochemical complex; Present worth; Rate of return; Return on investments, Boilers; Earnings; Economic analysis; Operating costs; Petrochemicals; Profitability; Sensitivity analysis; Waste heat, Investments