A chemical processing corporation is considering three methods to dispose of a non- hazardous chemical sludge: land application. Fluidized-bed incineration, and private disposal contract. The estimates for each method are shown. a) Determine which has the least cost on the basis of a present worth comparison at 10% per year for the following scenarios (You may assume a planning horizon of 6 years. The estimates are as shown the table b) If land application and incineration costs are as shown in the table, but the annual cost of the contract award cost increase br 20% everv time the contract is renewed (every 2 years) Use factors or formulas
A chemical processing corporation is considering three methods to dispose of a non- hazardous chemical sludge: land application. Fluidized-bed incineration, and private disposal contract. The estimates for each method are shown. a) Determine which has the least cost on the basis of a present worth comparison at 10% per year for the following scenarios (You may assume a planning horizon of 6 years. The estimates are as shown the table b) If land application and incineration costs are as shown in the table, but the annual cost of the contract award cost increase br 20% everv time the contract is renewed (every 2 years) Use factors or formulas
Chapter1: Making Economics Decisions
Section: Chapter Questions
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A chemical processing corporation is considering three methods to dispose of a non-
hazardous chemical sludge: land application. Fluidized-bed incineration, and private disposal contract. The estimates for each method are shown.
a) Determine which has the least cost on the basis of a present worth comparison at 10% per year for the following scenarios (You may assume a planning horizon of 6 years.
The estimates are as shown the table
b) If land application and incineration costs are as shown in the table, but the annual cost of the contract award cost increase br 20% everv time the contract is renewed (every 2 years)
Use factors or formulas
Transcribed Image Text:First cost.
Annual operational cost
Salvage value
Life
Land Application Incineration Contract
-$900,000
$0
-$60,000
-$120,000
$300,000
$0
6 years
2 years
-$130,000
-$95,000
$25,000
3 years
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