A large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year. System Centrifuge Belt Press First cost, $ −235,000 −150,000 AOC, $/year −48,000 −41,000 Overhaul in year 2, $ -- −26,000 Salvage value, $ 40,000 10,000 Life, years 6 4 The annual worth of the centrifuge system is $− , and the annual worth of the belt
A large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year. System Centrifuge Belt Press First cost, $ −235,000 −150,000 AOC, $/year −48,000 −41,000 Overhaul in year 2, $ -- −26,000 Salvage value, $ 40,000 10,000 Life, years 6 4 The annual worth of the centrifuge system is $− , and the annual worth of the belt
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year.
System |
Centrifuge |
Belt Press |
First cost, $ |
−235,000 |
−150,000 |
AOC, $/year |
−48,000 |
−41,000 |
Overhaul in year 2, $ |
-- |
−26,000 |
Salvage value, $ |
40,000 |
10,000 |
Life, years |
6 |
4 |
The annual worth of the centrifuge system is $− , and the annual worth of the belt press system is $− .
The system selected on the basis of the annual worth analysis is the (Click to select) belt press centrifuge system.
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