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 First cost, $ Centrifuge -250,000 AOC, $/year -31,000 Overhaul in year 2, $ Salvage value, $ 40,000 Life, years 6 Belt Press -170,000 -35,000 -26,000 10,000 4 The annual worth of the centrifuge system is $- 76216 ✪, and the annual worth of the belt press system is $- 82283.7 The system selected on the basis of the annual worth analysis is the centrifuge system.
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 First cost, $ Centrifuge -250,000 AOC, $/year -31,000 Overhaul in year 2, $ Salvage value, $ 40,000 Life, years 6 Belt Press -170,000 -35,000 -26,000 10,000 4 The annual worth of the centrifuge system is $- 76216 ✪, and the annual worth of the belt press system is $- 82283.7 The system selected on the basis of the annual worth analysis is the centrifuge system.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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
First cost, $
Centrifuge
-250,000
AOC, $/year
-31,000
Overhaul in year 2, $
Salvage value, $
40,000
Life, years
6
Belt Press
-170,000
-35,000
-26,000
10,000
4
The annual worth of the centrifuge system is $- 76216 ✪, and the annual worth of the belt press system is $- 82283.7
The system selected on the basis of the annual worth analysis is the centrifuge
system.
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