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Plant Design and Economics for Chemical Engineers, 5/e

# Glossary

Below you will find the Glossary of Common Terms. When you view the definition you will see the description.
 Annual operating cost Estimated annual costs to maintain and support an alternative. Book value Remaining capital investment in an asset after depreciation is accounted for. Breakeven point Quantity at which revenues and costs are equal, or two alternatives are equivalent. Capitalized cost Present worth of an alternative that will last forever (or a long time). Capital recovery Equivalent annual cost of owning an asset plus the required return on the initial investment. Cash flow Actual cash amounts which are receipts (inflow) and disbursements (outflow). Cost estimating relationships Relations that use design variables and changing costs over time to estimate current and future costs. Cost of capital Interest rate paid for the use of capital funds; includes both debt and equity funds. For debt and equity considered, it is weighted average cost of capital. Depreciation Reduction in the value of assets using specific models and rules; there are book and tax depreciation methods. Future amount or worth Amount at some future date considering time value of money. Gross income Income from all sources for corporations or individuals. Inflation rate Rate that reflects changes in the value of a currency over time. Interest rate Interest expressed as a percentage of the original amount per time period; nominal and effective rates. Life (estimated) Number of years or periods over which an alternative or asset will be used; the evaluation time. Minimum attractive rate of return Minimum value of the rate of return for an alternative to be financially viable. Net cash flow Resulting, actual amount of cash that flows in or out during a time period. Net present value Another name for the present worth. Payback period Number of years to recover the initial investment and a stated rate of return. Present amount or worth Amount of money at the current time or a time denoted as present. Rate of return Compound interest rate on unpaid or unrecovered balances such that the final amount results in a zero balance. Recovery period Number of years to completely depreciate an asset. Salvage value Expected trade-in or market value when an asset is traded or disposed of. Taxable income Amount upon which income taxes are based. Tax rate Decimal rate, usually graduated, used to calculate corporate or individual taxes.