AIR CONDITION & REFRIGERATION INSTALLATION & REPAIR

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1 AIR CONDITION & REFRIGERATION INSTALLATION & REPAIR SERVICE CAPACITY (Value) : Rs. 15,40,000/- MONTH AND YEAR : July, 2014 OF PREPARATION PREPARED BY : Sh. Sunil Arora Investigator (Mechanical) 1. INTRODUCTION Refrigeration stands for the Production of a cool confinement with respect to surroundings. Air conditioning is defined as the simultaneous control of temperature, humidity cleanliness & air motion. Refrigeration may be defined as the process of achieving and maintaining a temperature below that of the surroundings, the aim being to cool some product or space to the required temperature. Refrigeration systems are also used extensively for providing thermal comfort to human beings by means of air conditioning. Air Conditioning refers to the treatment of air so as to simultaneously control its temperature, moisture content, cleanliness, odour and circulation, as required by occupants, a process, or products in the space. 2. WORKING PRINCIPLE OF REFRIGERATION Based on the working principle, refrigeration systems can be classified as vapour compression systems, vapour absorption systems, gas cycle systems etc. The basic components of a vapour compression refrigeration system consist of an evaporator, compressor, condenser and an expansion valve. The refrigeration effect is obtained in the cold region as heat is extracted by the vaporization of refrigerant in the evaporator. The refrigerant vapour from the evaporator is compressed in the compressor to a high pressure at which its saturation temperature is greater than the ambient or any other heat sink. Hence when the high pressure, high temperature refrigerant flows through the condenser, condensation of the vapour into liquid takes place by heat rejection to the heat sink. To complete the cycle, the high pressure liquid is made to flow through an expansion valve. In the expansion valve the pressure and temperature of the refrigerant decrease. This low pressure and low temperature refrigerant vapour evaporates in the evaporator taking heat from the cold region. It should be observed that the system operates on a closed cycle. The system requires input in the form of mechanical work. It extracts heat from a cold space and rejects heat to a high temperature heat sink. -5-

2 The standard unit of refrigeration is ton refrigeration or simply ton denoted by TR. It is equivalent to the rate of heat transfer needed to produce 1 ton (2000 lbs) of ice at 32 0 F from water at 32 0 F in one day, i.e., 24 hours. The enthalpy of solidification of water from and at 32 0F in British thermal unit is 144 Btu/lb. Thus 1TR = 2000 lb x 144 Btu/lb 24 hr = Btu/hr = 200 Btu/min If Btu ton unit is expressed into SI system, it is found to be 210 kj/min or 3.5 kw. Refrigeration effect is an important term in refrigeration that defines the amount of cooling produced by a system. This cooling is obtained at the expense of some form of energy. Therefore, it is customary to define a term called coefficient of performance (COP) as the ratio of the refrigeration effect to energy input. COP = Refrigeration effect Energy input 3. MARKET POTENTIAL In today s time the use of A.C & fridge has become a essential part of the routine life. The new technology in this sector makes use of air conditioner not only in summer season but in winter also. Day by day sale of these items are growing the Indian AC market accounted for sales of 3.6 million units in AC s had a 13.0 per cent share (2013) in the consumer appliances market. High income growth and rising demand for split ACs are the key growth drivers in this sector. The sale of Refrigerator was approximately 14.0 million units in This segment makes up 18.0 per cent of the consumer appliances market. Lower prices and rising demand for frost-free refrigerators are the key growth drivers in this sector. Fridges with a capacity range of litres dominated fridge sales over the last few years. -6-

3 Some applications of refrigeration and air conditioning are as follows:- Air Conditioning of Residential and Official Buildings Industrial Air Conditioning Food Storage and Distribution Environmental Laboratories 4. BASIS AND PRESUMPTIONS This project is made on the basis of the following presumptions: i. It is assumed that the unit will be viable at 75% efficiency on single shift basis considering 6 working days per week. ii. iii. iv. The rate of interest in the scheme is taken at 14% for both fixed and working capital. Due to liberalization and competition among banks, lower rate of interest is possible in future. The prices of machinery and equipments are approximate which are ruling locally at the time of preparation of the project. When a tailor-cut project is prepared the necessary changes are to be made at the local level. The cost of staff and labor is approximate which is ruling locally at the time of preparation of the profile. When a tailor-cut project is prepared the necessary changes are to be made. v. BEP in the scheme has been calculated on the basis of full capacity utilization. 5. Motive Power Total Power Requirement is about 2 KW. 6. FINANCIAL ASPECT 6.1. Fixed Capital Land & Building: Covered area of 180 Sq. Ft. on rent Machinery and Equipments S. N. Description of Machine Quantity Amount (Rs) 1 Oxygen Gas Cylinder 10 Kg 02 10,000 2 LPG Gas Cylinder 05 Kg Capacity 02 2,000 3 Welding torch & Hose Pipe (10 Long) 02 5,000 4 Pipe cutter, pliers & other Hand tools etc. L.S 5,000 5 Portable drill Machine (Max drill size 1/2 ) 02 5, Office equipment, furniture, etc. L.S. 10, Preoperative expenses L.S. 10,000 TOTAL 47,000-7-

4 6.2. Working Capital (per month) Personnel S. No. Designation No Salary (Rs.) Total (Rs.) 1 Skilled worker 2 9,500 19,000 2 Helper 2 6,500 13,000 3 Sweeper (Part time) % of salary 6,500 Total 39, Raw Materials including Packaging Materials Items Qty Rate (Rs.) Amount (Rs.) Oxygen Gas 20 kg 20/kg 400 LPG 10 kg 80/kg 800 Copper Pipe ½ dia 30 75/foot 2,250 Copper Pipe ¼ dia 30 40/foot 1,200 Refrigerant R kg 1100/kg 2,200 Refrigerant R-134a 03 kg 1200/kg 3,600 Refrigerant R kg 1000/kg 20,000 3 core wire 2.5mm, Capacitor, relay thermostat & other Misc parts L.S 10,000 Total 40, Utilities 1. Power: 400 Rs. 6/unit Rs. 2, Water: LS Rs. 500 Total Rs. 2, Other Contingent Expenses S. No. Description Value (Rs.) 1 Rent 6,000 2 Conveyance & Transport Expenses 8,000 3 Telephone 1,000 4 Advertisement/publicity Miscellaneous Expenses 1,500 Total 17, Total Recurring Expenditure (per month) Rs. 99,350/ Total Capital Investment Fixed Capital Rs. 47,000 Working Capital (for 3 months) Rs. 2,98,050 Total Rs. 3,45,050/- -8-

5 7. FINANCIAL ANALYSIS 7.1. Cost of Operation (per annum) Air Condition & Refrigeration Installation & Repair S.No. Description Amount (Rs.) 1 Total Recurring Cost per year 11,92,200 2 Depreciation on Machinery & 10% 2,700 3 Depreciation on Office Equipment & 20% 2,000 4 Interest on Total 14% 48, Turnover (per annum) Total 12,45,207 S.N. Item Quantity Rate (Rs.) Value (Rs.) 1. Installation & Fitting of New A.C 300 1,500 4,50,000 2 Gas filling of Air Conditioner 200 2,000 4,00, AC Servicing ,40, Gas filling in Refrigerator 100 1,500 1,50, Misc. Repair like Thermostat, Start coil motor, etc Net Profit (per annum) = Turnover Cost of Operation = Rs. 2,94,793/- L.S 3,00,000 Total 15,40, Net Profit Ratio Net profit per year = Turnover per year X 100 = 19.1 % 7.5. Rate of Return Net profit per year = Total Capital Investment X 100 = 85.4 % -9-

6 7.6. Break-even Point Fixed Cost (Per Annum) (Rs.) Rent 72,000 Total Depreciation 4,700 Total Interest 48,307 40% of salary and wages 1,87,200 40% of other Contingent expenses (Excluding rent) 52,800 Total 3,65,007 B.E.P = Fixed Cost Fixed Cost + Net Profit X 100 = 55.3 % Raw Material & other tools, equipments will be procured from open market. -10-

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