Capital Cost of Project with Capacity Q1 using Sixth Tenth Rule Calculator

Formula Used:

\[ C1 = C2 \times \left(\frac{Q1}{Q2}\right)^n \times \frac{I2}{I1} \]

Capital Cost of Project with Capacity Q2:

Capacity of Equipment 1:

m²

Capacity of Equipment 2:

m²

Value of Index:

Cost Index 2:

Cost Index 1:

Capital Cost of Project with Capacity Q1:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Sixth Tenth Rule?

The Sixth Tenth Rule is an empirical method used in engineering economics to estimate the capital cost of a project based on known costs of similar projects with different capacities. It accounts for economies of scale in capital investment.

2. How Does the Calculator Work?

The calculator uses the Sixth Tenth Rule formula:

\[ C1 = C2 \times \left(\frac{Q1}{Q2}\right)^n \times \frac{I2}{I1} \]

Where:

$ C1 $ — Capital Cost of Project with Capacity Q1 ($)
$ C2 $ — Capital Cost of Project with Capacity Q2 ($)
$ Q1 $ — Capacity of Equipment 1 (m²)
$ Q2 $ — Capacity of Equipment 2 (m²)
$ n $ — Value of Index (typically 0.6)
$ I2 $ — Cost Index 2
$ I1 $ — Cost Index 1

Explanation: The formula adjusts the known cost of a project with capacity Q2 to estimate the cost of a similar project with capacity Q1, accounting for cost index changes over time.

3. Importance of Capital Cost Estimation

Details: Accurate capital cost estimation is crucial for project feasibility studies, budget planning, investment decisions, and financial modeling in engineering and construction projects.

4. Using the Calculator

Tips: Enter all known values in the appropriate units. Ensure capacity values are in consistent units (typically m²). The index value 'n' is typically 0.6 (hence the name "Sixth Tenth Rule") but may vary by industry.

5. Frequently Asked Questions (FAQ)

Q1: Why is the index typically 0.6?
A: The 0.6 exponent reflects the empirical observation that costs increase at about 60% of the rate of capacity increase due to economies of scale.

Q2: When should cost indices be used?
A: Cost indices should be used when the reference cost data is from a different time period to account for inflation and changing market conditions.

Q3: What are typical cost indices used?
A: Common cost indices include Chemical Engineering Plant Cost Index (CEPCI), Marshall & Swift Equipment Cost Index, and Construction Cost Index.

Q4: What are the limitations of this method?
A: The method assumes similar technology, design, and construction methods. It becomes less accurate for very large capacity differences or different process technologies.

Q5: Can this method be used for different types of projects?
A: Yes, but the exponent 'n' may need adjustment. Different industries may have different typical exponent values based on their specific scaling characteristics.