A large water utility is planning to upgrade its SCADA system for controlling well pumps, booster pumps, and disinfection equipment, so that everything can be controlled from one site. The first phase will reduce labor and travel cost by $14,000 per year. The second phase will reduce costs by additional $9,000 per year. If Phase-I savings occur in years 0, 1, 2, and 3 and Phase-II occurs in years 4 through 10. Determine the equivalent worth of the upgraded system in years 1 through 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, so that everything can be controlled from one site. The first phase will reduce labor and travel cost by $14,000 per year. The second phase will reduce costs by additional $9,000 per year. If Phase-I savings occur in years 0, 1, 2, and 3 and Phase-II occurs in years 4 through 10. Determine the equivalent worth of the upgraded system in years 1 through 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, so that everything can be controlled from one site. The first phase
will reduce labor and travel cost by $14,000 per year. The second phase will reduce costs by additional
$9,000 per year. If Phase-I savings occur in years 0, 1, 2, and 3 and Phase-II occurs in years 4 through
10. Determine the equivalent worth of the upgraded system in years 1 through 10 at an interest rate of
8% per year.
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