A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valves and other appurtenances) but will have a high head loss and, therefore, a higher pumping cost. The small pipeline has an initial investment cost of $10,000 and the operating cost on the pipeline for 5 years. The operating cost averages are steady at $500 per year for the first 3 years, and will be $700 in year 4, $900 in year 5. A large-diameter pipeline has an initial investment cost of $8,500, but its annual operating cost is not known. If your company would like to choose a large- diameter pipeline due to the practical use and various factors, what is the maximum operating cost average of a large-diameter pipeline in each year? (At an interest rate of 10%) Assume The salvage value is 20% of the first cost for a small pipeline at the end of the 5- year period. The salvage value is 11% of the first cost for a large-diameter pipeline at the end of the 5-year period.

A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valves and other appurtenances) but will have a high head loss and, therefore, a higher pumping cost. The small pipeline has an initial investment cost of $10,000 and the operating cost on the pipeline for 5 years. The operating cost averages are steady at $500 per year for the first 3 years, and will be $700 in year 4, $900 in year 5. A large-diameter pipeline has an initial investment cost of $8,500, but its annual operating cost is not known. If your company would like to choose a large- diameter pipeline due to the practical use and various factors, what is the maximum operating cost average of a large-diameter pipeline in each year? (At an interest rate of 10%) Assume The salvage value is 20% of the first cost for a small pipeline at the end of the 5- year period. The salvage value is 11% of the first cost for a large-diameter pipeline at the end of the 5-year period.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please Answer My Questions Economics no 3 In 30-35 Minutes as u know from the sub parts A,B,C..... And send u get Answer please thank u
the The fixed costs at Mahi consulting company are $120,000 annually. The annual revenue is $3,000 per client and each client has a $500 variahl cost. Find the breakeven point per year and the annual profit/loss if 408 60 clients have are serviced next year.
please show/explain how you got the answer
Solve part d only Solution of ist 3 parts is provided Only d Partd only
Compare the alternatives below using AW and i = 10% per year D -350,000 -35,000 35,000 ∞ First Cost, $ Annual operating cost, $/year Salvage value, $ Life, years с -150,000 - 10,000 15,000 10
Pierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km per year and lives in a downtown apartment where they must pay a $63 per month parking fee. Pierre has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(13.7L Per 100KM)($1.71 Per Liter) Licence/Registration Insurance Maintenance Tires ($1407 per set that last 42000KM) Parking (48 Months) Interest Depreciation (STRAIGHT LINE) Cost Fixed/Variable Variable $483 Fixed $3309 Fixed $960 Variable Variable $3024 Fixed $3090 Fixed $ Fixed CALCULATE THE FOLLOWING USING THE ABOVE INFORMATION: TOTAL FIXED COSTS (TFC) TOTAL VARIABLE COSTS (TVC) TOTAL COSTS (TC) TOTAL KMS AVG. FIXED COSTS/KM $ AVG. VARIABLE COSTS/KM $ AVG. TOTAL COSTS/KM $ 48000KM
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm's production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,025.00 per year for 8 years and costs $102,242.00. The ÚGA-3000 produces incremental cash flows of $27,530.00 per year for 9 years and cost $126,773.00. The firm's WACĆ is 8.37%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
For the cash flows shown, determine the incremental cash flow between machines B and A for (a) year 0, (b) in year 3, and (c) in year 6. Machine First Cost, $ АОС, $/year Salvage value, $ 3,000 Life, years B -15,000 -25,000 -1,600 -400 6,000 3 4 O (a) = -10000 (b) = -1800 (c) = 1200 %3D !3! O (a) = -10000 (b) = 13200 (c) = 4200 !3! %3! O (a) = -10000 (b) = 13200 (c) =6000 %3! %3D O (a) = -10000 (b) = 13200 (c) = 13200 %3D
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm’s production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $24,998.00 per year for 8 years and costs $99,590.00. The UGA-3000 produces incremental cash flows of $29,475.00 per year for 9 years and cost $126,038.00. The firm’s WACC is 8.32%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
Show your complete solution.
Need help.
8uyu