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A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________
Correct answer is between '2.55,2.70'. Can you explain this answer?
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A polymer plant with a production capacity of 10,000 tons per year has...
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Given data:
Production capacity of polymer plant = 10,000 tons/year
Overall yield with current process = 70%
Overall yield with proposed process modification = 75%
Raw material cost = Rs. 50,000/ton
Investment for process modification = Rs. 12.5 crore
Calculation:
1. Calculate the production of polymer with the current process:
Production = Production capacity * Overall yield
= 10,000 tons/year * 70%
= 7,000 tons/year
2. Calculate the production of polymer with the proposed process modification:
Production = Production capacity * Overall yield
= 10,000 tons/year * 75%
= 7,500 tons/year
3. Calculate the additional production from the proposed process modification:
Additional production = Production with proposed process - Production with current process
= 7,500 tons/year - 7,000 tons/year
= 500 tons/year
4. Calculate the additional profit from the proposed process modification:
Additional profit = Additional production * Raw material cost
= 500 tons/year * Rs. 50,000/ton
= Rs. 2.5 crore/year
5. Calculate the payback period for the investment:
Payback period = Investment / Additional profit
= Rs. 12.5 crore / Rs. 2.5 crore/year
= 5 years
Conclusion:
The invested amount can be recovered in 5 years with the additional profit.
Production capacity of polymer plant = 10,000 tons/year
Overall yield with current process = 70%
Overall yield with proposed process modification = 75%
Raw material cost = Rs. 50,000/ton
Investment for process modification = Rs. 12.5 crore
Calculation:
1. Calculate the production of polymer with the current process:
Production = Production capacity * Overall yield
= 10,000 tons/year * 70%
= 7,000 tons/year
2. Calculate the production of polymer with the proposed process modification:
Production = Production capacity * Overall yield
= 10,000 tons/year * 75%
= 7,500 tons/year
3. Calculate the additional production from the proposed process modification:
Additional production = Production with proposed process - Production with current process
= 7,500 tons/year - 7,000 tons/year
= 500 tons/year
4. Calculate the additional profit from the proposed process modification:
Additional profit = Additional production * Raw material cost
= 500 tons/year * Rs. 50,000/ton
= Rs. 2.5 crore/year
5. Calculate the payback period for the investment:
Payback period = Investment / Additional profit
= Rs. 12.5 crore / Rs. 2.5 crore/year
= 5 years
Conclusion:
The invested amount can be recovered in 5 years with the additional profit.
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A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer?
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A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer?.
A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer? for GATE 2024 is part of GATE preparation. The Question and answers have been prepared according to the GATE exam syllabus. Information about A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer? covers all topics & solutions for GATE 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A polymer plant with a production capacity of 10,000 tons per year has an overall yield of 70%, on mass basis (kg of product per kg of raw material). The raw material costs Rs. 50,000 per ton. A process modification is proposed to increase the overall yield to 75% with an investment of Rs. 12.5 crore. In how many years can the invested amount be recovered with the additional profit? ___________Correct answer is between '2.55,2.70'. Can you explain this answer?.
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