9-6. A steam generation system at a biomass- fueled power plant uses an electrostatic preci- pitator (ESP) to clean its gaseous effluents. The power plant has consistently made use of the same type of ESP over the past several years. The installed cost of a new ESP has been relatively constant at $80,000. Records of operation and maintenance expenses indicate the following average expenses per year as a function of the age of the ESP. The MVs of the ESP are also reasonably well known as a function of age. 1 Year O&M expense $30,000 $30,000 $35,000 $40,000 $45,000 Market value 60,000 50,000 40,000 25,000 12,500 2 3 4 5 Determine the best time to replace the ESP if the MARR is 15% per year. (9.5)
9-6. A steam generation system at a biomass- fueled power plant uses an electrostatic preci- pitator (ESP) to clean its gaseous effluents. The power plant has consistently made use of the same type of ESP over the past several years. The installed cost of a new ESP has been relatively constant at $80,000. Records of operation and maintenance expenses indicate the following average expenses per year as a function of the age of the ESP. The MVs of the ESP are also reasonably well known as a function of age. 1 Year O&M expense $30,000 $30,000 $35,000 $40,000 $45,000 Market value 60,000 50,000 40,000 25,000 12,500 2 3 4 5 Determine the best time to replace the ESP if the MARR is 15% per year. (9.5)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:9-6. A steam generation system at a biomass-
fueled power plant uses an electrostatic preci-
pitator (ESP) to clean its gaseous effluents. The power
plant has consistently made use of the same type of ESP
over the past several years. The installed cost of a new
ESP has been relatively constant at $80,000. Records
of operation and maintenance expenses indicate the
following average expenses per year as a function of the
age of the ESP. The MVs of the ESP are also reasonably
well known as a function of age.
1 2 3
Year
O&M
expense $30,000 $30,000 $35,000 $40,000 $45,000
Market
value
60,000 50,000 40,000 25,000 12,500
4
5
Determine the best time to replace the ESP if the MARR
is 15% per year. (9.5)
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