A large textile company is trying to decide among three alternatives of sludge dewatering g, processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? \table[[Alternative,x,Y,Z 6) A large textile company is trying to decide among three alternatives of sludge dewatering processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? Alternative X Y Z Installed costs $68,500 $48,500 $33,500 Annual operating costs. $6000 $4000 $5000 Overhaul cost in year 2 $9700 Salvage value $33,250 $28,250 $15,750 Useful life, years 8 2

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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A large textile company is trying to decide among three alternatives of sludge dewatering g, processes. The costs
associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At
the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating
costs. If the MARR is 14% per year, which alternative should be chosen? \table[[Alternative,x,Y,Z
6) A large textile company is trying to decide among three alternatives of sludge dewatering
processes. The costs associated with these alternatives are shown below. Alternative Y
will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z
would be replaced with another alternative Z having the same installed and operating
costs. If the MARR is 14% per year, which alternative should be chosen?
Alternative
X
Y
Z
Installed costs
$68,500
$48,500 $33,500
Annual operating costs.
$6000
$4000
$5000
Overhaul cost in year 2
$9700
Salvage value
$33,250
$28,250
$15,750
Useful life, years
8
2
Transcribed Image Text:A large textile company is trying to decide among three alternatives of sludge dewatering g, processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? \table[[Alternative,x,Y,Z 6) A large textile company is trying to decide among three alternatives of sludge dewatering processes. The costs associated with these alternatives are shown below. Alternative Y will need an upgrade of $9700 at the end of year 2. At the end of year 2, alternative Z would be replaced with another alternative Z having the same installed and operating costs. If the MARR is 14% per year, which alternative should be chosen? Alternative X Y Z Installed costs $68,500 $48,500 $33,500 Annual operating costs. $6000 $4000 $5000 Overhaul cost in year 2 $9700 Salvage value $33,250 $28,250 $15,750 Useful life, years 8 2
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