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 12% per year, which alternative should be chosen?
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 12% per year, which alternative should be chosen?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![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 12% per year, which alternative should be chosen?
Alternative
Y
Installed costs
S68500
S48500
$33500
Annual operating costs
S6000
S4000
S5000
Overhaul cost in year 2
$9700
Salvage value (S) [your student
ID/10)
ID +10
ID- 10
ID- 10
Useful life, years
2.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e9fb7a6-c940-4212-929c-6e2c52ba920d%2F0aab77af-b580-4edb-b698-fc658fb42d0f%2F02bhh3q_processed.png&w=3840&q=75)
Transcribed Image Text: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 12% per year, which alternative should be chosen?
Alternative
Y
Installed costs
S68500
S48500
$33500
Annual operating costs
S6000
S4000
S5000
Overhaul cost in year 2
$9700
Salvage value (S) [your student
ID/10)
ID +10
ID- 10
ID- 10
Useful life, years
2.
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