Capital structure in project economics: The total capital investment (TCI) of a chemical process plant comprises fixed capital investment plus which other component?

Introduction / Context:
Total capital investment (TCI) is a fundamental figure in feasibility studies and financial evaluation. TCI covers both the cost to build and equip the plant (fixed capital) and the funds needed to operate it day-to-day before revenues stabilize (working capital).

Given Data / Assumptions:

• Fixed capital investment (FCI) includes process equipment, installation, buildings, utilities, yard improvements, and related construction costs.
• Working capital funds inventories of raw materials and products, receivables, and initial operating cash needs.
• Overheads, direct/indirect production costs are operating (not capital) categories.

Concept / Approach:
By standard definition, TCI = FCI + Working Capital. FCI sets the physical capability; working capital supports initial operations and cash cycle timing (procure, produce, sell, collect). Without adequate working capital, plants can be technically complete but financially unable to run efficiently.

Step-by-Step Solution:
Identify the capital categories: fixed vs. working.Map operating costs (overheads, direct/indirect costs) to non-capital categories.Conclude: the missing component is working capital.

Verification / Alternative check:
Consult standard cash-flow statements: initial cash outflows typically show construction (FCI) and a working capital charge at start-up, both summing to TCI.

Why Other Options Are Wrong:
Overhead cost / direct / indirect production cost / general expenses: These are operating or period costs, not capital.

Common Pitfalls:
Confusing one-time capital outlays with recurring operating costs; failing to reserve cash for inventories and receivables during ramp-up.

Final Answer:
Working capital