A pipeline engineer working in Kuwait for the oil giant BP wants to perform a present worth analysis on alternative pipeline routings-the first predominately by land and the second primarily undersea. The undersea route is more expensive initially due to extra corrosion protection and installation costs, but cheaper security and maintenance reduces annual costs. . Perform the annual worth analysis for the engineer at 12% per year as basis of choosing which route is to be selected. Land Undersea Installation cost P 315,000,000 P 450,000,000 Pumping, operating, security per year P 18,000,000 P 4,200,000 Replacement appurtenances in year 25 of valves and P 40,000,000 P 85,000,000 Life, years 50 50

A pipeline engineer working in Kuwait for the oil giant BP wants to perform a present worth analysis on alternative pipeline routings-the first predominately by land and the second primarily undersea. The undersea route is more expensive initially due to extra corrosion protection and installation costs, but cheaper security and maintenance reduces annual costs. . Perform the annual worth analysis for the engineer at 12% per year as basis of choosing which route is to be selected. Land Undersea Installation cost P 315,000,000 P 450,000,000 Pumping, operating, security per year P 18,000,000 P 4,200,000 Replacement appurtenances in year 25 of valves and P 40,000,000 P 85,000,000 Life, years 50 50

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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