An effective method to recover water used for regeneration of ion exchange resins is to use a reverse osmosis system in a batch treatment mode. Such a system involves recirculation of the partially treated water back into the feed tank, causing the water to heat up. The water can be cooled using one of two systems: a single-pass heat exchanger or a closed-loop heat exchange system. The single-pass system, good for 4 years, requires a small chiller costing $900 plus stainless steel tubing, connectors, valves, etc. costing $600. The cost of water, treatment charges, electricity, etc. will be $5 per hour. The closed-loop system will cost $4, 000 to buy, will have a useful life of 6 years, and will cost $2 per hour to operate. An overhaul cost of $200 is incurred in the first year and this cost is increased by 5% every year. What is the minimum number of hours per year that the cooling system must be used in order to justify purchase of the closed-loop system? The interest rate is 10% per year, and the salvage values are negligible.
An effective method to recover water used for regeneration of ion exchange resins is to use a reverse osmosis system in a batch treatment mode. Such a system involves recirculation of the partially treated water back into the feed tank, causing the water to heat up. The water can be cooled using one of two systems: a single-pass heat exchanger or a closed-loop heat exchange system. The single-pass system, good for 4 years, requires a small chiller costing $900 plus stainless steel tubing, connectors, valves, etc. costing $600. The cost of water, treatment charges, electricity, etc. will be $5 per hour. The closed-loop system will cost $4, 000 to buy, will have a useful life of 6 years, and will cost $2 per hour to operate. An overhaul cost of $200 is incurred in the first year and this cost is increased by 5% every year. What is the minimum number of hours per year that the cooling system must be used in order to justify purchase of the closed-loop system? The interest rate is 10% per year, and the salvage values are negligible.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An effective method to recover water used for regeneration of ion exchange resins
is to use a reverse osmosis system in a batch treatment mode. Such a system involves recirculation
of the partially treated water back into the feed tank, causing the water to heat up. The water can
be cooled using one of two systems: a single-pass heat exchanger or a closed-loop heat exchange
system.
The single-pass system, good for 4 years, requires a small chiller costing $900 plus stainless steel
tubing, connectors, valves, etc. costing $600. The cost of water, treatment charges, electricity, etc.
will be $5 per hour.
The closed-loop system will cost $4, 000 to buy, will have a useful life of 6 years, and will cost $2
per hour to operate. An overhaul cost of $200 is incurred in the first year and this cost is increased
by 5% every year.
What is the minimum number of hours per year that the cooling system must be used in order
to justify purchase of the closed-loop system? The interest rate is 10% per year, and the salvage
values are negligible.
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