Early-Stage Capital Cost Estimation | AIChE

You are here

Early-Stage Capital Cost Estimation

Early-stage capital cost estimates are critical to determining the financial feasibility of a project.

Thoughtful decisions about capital investment expenditures (CAPEX) can ensure the success of operations and the ability to reliably supply products to customers. In industries such as renewable energy production, petroleum refining, semiconductor manufacturing, and consumer product manufacturing, early-stage cost estimation enables selection of profitable investment opportunities. These estimates also present the best opportunity to decrease the environmental impacts of operations or technologies by identifying environmental or regulatory constraints while maximizing profit. Agile conceptual cost-estimating techniques guide informed and timely decisions to maximize the return on invested capital (ROIC).

This article is Part I of a two-part series on capital cost estimation. Part I defines the five types of capital cost estimates, but focuses on early-stage cost estimating methods such as ratio estimates, industry-specific correlations, and unit cost estimates. Part II, to be published in July 2021, will address detailed capital cost estimation.

Would you like to access the complete CEP Article?

No problem. You just have to complete the following steps.

You have completed 0 of 2 steps.

  1. Log in

    You must be logged in to view this content. Log in now.

  2. AIChE Membership

    You must be an AIChE member to view this article. Join now.

Copyright Permissions 

Would you like to reuse content from CEP Magazine? It’s easy to request permission to reuse content. Simply click here to connect instantly to licensing services, where you can choose from a list of options regarding how you would like to reuse the desired content and complete the transaction.