Investment Analysis

Lesson Objectives
 Understand and implement investment parameters and review short and long-term economic performance
of a project

 Create and study alternative project scenarios for comparison of process alternatives

 Workshop 10: Evaluate Alternative Scenarios; Part A

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Using the Investment Analysis Module
 First time through:
– Run Project Scope Module
– Load, map, and size simulator equipment
– Add other areas, equipment
– Run Capital Cost and Schedule Module
– Run estimate including all items
– Select Operating costs
– Run Investment Analysis Module
– Modify spreadsheets (if required)
– Re-calculate, re-plot

 Following times through:

– Skip load, map, size, and evaluate unless redesigning

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Investment Evaluations
 EQUIP.ICS… Component TDC
 PROJSUM.ICS… Total capital and operating costs
– Summary of capital costs (directs + indirects)
– Raw materials usages and costs
– Utilities usages and costs
– Supervisory and maintenance labor costs

 CASHFLOW.ICS… Various analysis

– Summary of other data + escalated capital costs
– Cashflows
– Typical economic metrics (NPV, IRR, PO, etc.)
– PI : Profitability Index - dividing the Present Value of the Cumulative Cash Inflows by the Present Value of the
Cumulative Cash Outflows

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Spreadsheet Capabilities

 Functions:
– Transport to or open directly in Microsoft Excel
 Use Tools | Options | View Spreadsheets in Excel
 Option to open Investment Analysis in Microsoft Excel
– User customization of spreadsheets
– Modify spreadsheet template
 Develop mathematical relationships / links
 Run cost and investment analysis in Aspen Process Economic Analyzer
 View spreadsheets / Load template

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Starting The Workshop

 Workshop 10: Evaluate Alternative Scenarios; Part A

 Create additional scenarios

 Load new simulator data

 Compare different scenarios and investment analyses

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Evaluate Alternative Scenarios: Part A
Workshop
Files can be found in folder: WS07_Start_Simulator

Objective
(SKILLS: create additional scenarios; load new simulator data; compare investment
analyses)
This example is designed to familiarize you with the process of creating new scenarios.
The goal of creating scenarios is to compare the financial viability of the two or more
projects or options and pick the most profitable option (financial optimization).

Background
While working late one night, a co-worker stumbled across a flowsheet of your proposed
process in the output bin of the network printer. She looked at the flowsheet and instantly
knew which project this flowsheet was for, since everyone in the lunchroom that day was
talking about how your company was going to make money hand over fist on this process.
She thought she saw some improvements that could be made to the process and pencilled
up that flowsheet with the proposed changes and left it in your in-box. You came in the
next day, and reran the simulation with these changes. The new flowsheet shown below,
details her idea of processing the waste CO2 from the fermentation into a sellable
product.

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1. Ensure the previous simulation files are closed. Access the workshop folder and open
“ETOH2_CO2_production.bkp” file which contains alternative process.

2. Re-run the case file and use “Send to APEA” button to move to Aspen Process
Economic Analyzer.

3. We will make sure to create different project folder for the alternative case. Put
“ETOH2” as the Project name and “Alter Case_CO2 production” as the scenario
name. Use “LA Template” that we created in Workshop 6.

4. Click OK for Unit of measure and General project data windows.

5. Close the “etoh2” Aspen Plus simulator.

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6. Go to Project Basis View | Process Design | Simulator File Name. Right click and
select “Edit”. Make sure that your project file is referencing “etoh2.bkp” simulation.

Sometimes Aspen Process Economic Analyzer is loading from Aspen Plus back-up
file, user may need to ensure this process.

7. Click “Load the simulator data” to ensure the import.

8. Click OK when pop-up message open.

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9. Since this scenario has a same raw material and product stream information as base
case, right click Raw Material Specifications and choose Select. Selection windows
will be opened. Choose “ETHANOL_PROJECT” that we defined in the previous
workshop.

See the pop-up message. You will need to re-connect stream information if your flowsheet
structure has changed.

10. Repeat the same for Product Specifications.

11. Right click Utility Specifications and click Select. Choose “LA_Utility”.

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12. Since this scenario has a new product stream we will be selling, we need to add it to
our Stream Pricing. Right click Product Specifications and choose Edit. Add CO2
Product stream with the below information.

New Product Name Liquid CO2

Basis Mass
Phase Liquid
Process stream CO2-PROD

Unit Cost $0.15/LB [0.33/KG]

13. Liquid CO2 is now added. Right click Product Specifications and click Export to
Library. Save the new product specifications as “Ethanol_Project2”.

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14. Take a look in the Process View tab and notice that all the simulation blocks are linked
to the project file. Yellow colour indicate that Mapping is not done yet.

15. Map the case file. After the Map preview windows is opened, review the mapping
results for the new unit operations. Use the default mapping and click OK.

16. Evaluate the project. Some new warnings arise but not the error, continue to evaluate.
These warnings are come from the pressure ratio and temperature condition of the
compressor. Note that this value shall be optimized before we get to the real project.
At this phase, we are going to focus on the Feasibility of the alternative process. Ignore
these warnings and proceed the evaluation.

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When it has finished running, Invest Analysis will be shown on the list view. go to the
Cashflow tab, column C : row 122, and take note of the value of PI (Profitability
Index). Is the value of PI improved from the base case?

PI Value
Base Case (etoh1) Alter. Case (etoh2)

17. In the main Aspen Process Economic Analyzer window, drag the left window divider
bar all the way to the left, and the right window divider bar to the far right side of the
screen. Select View | Block Flow Diagram and inspect the block flow diagram. When
satisfied, close the block flow diagram and open the streams list via View | Streams
List. From within the streams list, note that there is a combination of streams from the
simulator, internal streams generated for sizing equipment (ICP prefix), and there are
streams that are utilities streams match to heat transfer equipment (ICU prefix). When
done inspecting the stream results, close the window. Next select View | Process Flow
Diagram from the main menu. From within this PFD, you can double click on a stream
to reveal its information and properties. Alternatively, you can click on it, then right
click and select Modify. If you double click on an icon in the PFD, that displays the
input forms for that component. We will learn more about the PFD later. Close this
PFD by clicking on the “X” below the “X” that ends the program in the upper right of
the program window.

18. From the main menu, Select Tools | Options | View Spreadsheets in Excel if it is
selected.

19. Click the Investment Analysis button on the toolbar again.

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20. Now you will see the Investment Analysis is directly opened in Microsoft Excel
which will give you more information about the estimate. Briefly browse through the
four spreadsheet tab views located in the Results tab of the Main Window: Equipment,
Project Summary, Cashflow, and Executive Summary, examining the information that
is available.

21. Save your results at this time via File | Save As and keep the default Project Name
(ETOH2) and current Scenario Name (Alter Case_CO2 Production) and allow the
existing ones to be over written.

22. End of exercise.

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Notes:

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