A large water utility is planning to upgrade its SCADA system for controlling well pumps, booster pumps, and disinfection equipment for centralized monitoring and control. Phase I will reduce labor and travel costs by $28,000 per year. Phase II will reduce costs by an additional $20,000 per year, that is $48,000. If phase I savings occur in years 0, 1, 2, and 3 and phase II savings occur in years 4 through 10, what is the present worth of the upgraded system in years 1 to 10 at an interest rate of 8% per year?
A large water utility is planning to upgrade its SCADA system for controlling well pumps, booster pumps, and disinfection equipment for centralized monitoring and control. Phase I will reduce labor and travel costs by $28,000 per year. Phase II will reduce costs by an additional $20,000 per year, that is $48,000. If phase I savings occur in years 0, 1, 2, and 3 and phase II savings occur in years 4 through 10, what is the present worth of the upgraded system in years 1 to 10 at an interest rate of 8% per year?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A large water utility is planning to upgrade its
SCADA system for controlling well pumps, booster
pumps, and disinfection equipment for centralized
monitoring and control. Phase I will reduce labor
and travel costs by $28,000 per year. Phase II will
reduce costs by an additional $20,000 per year, that
is $48,000. If phase I savings occur in years 0, 1, 2,
and 3 and phase II savings occur in years 4 through
10, what is the present worth of the upgraded system
in years 1 to 10 at an interest rate of 8% per year?
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