An engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $203,000 to buy and $85,000 per year to operate. Belts will be replaced one time per year at a cost of $5500. Centrifuges (Cent) will cost $396,000 to buy and $119,000 per year to operate, but because the centrifuge will produce a thicker “cake”, the sludge hauling cost to the monofill will be $37,000 per year less than for the belt presses. The useful lives are 5 and 10 years for alternatives BFP and Cent, respectively, and the salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. Use PW evaluation to select the more economical process at an interest rate of 6% per year over (a) the LCM of lives, and (b) a study period of 8 years. Are the decisions the same?
An engineer is trying to decide which process to
use to reduce sludge volume prior to disposal. Belt
filter presses (BFP) will cost $203,000 to buy and
$85,000 per year to operate. Belts will be replaced
one time per year at a cost of $5500. Centrifuges
(Cent) will cost $396,000 to buy and $119,000 per
year to operate, but because the centrifuge will
produce a thicker “cake”, the sludge hauling cost
to the monofill will be $37,000 per year less than
for the belt presses. The useful lives are 5 and 10
years for alternatives BFP and Cent, respectively,
and the salvage values are assumed to be 10% of
the first cost of each process whenever they are
closed down or replaced. Use PW evaluation to select
the more economical process at an interest rate
of 6% per year over (a) the LCM of lives, and (b) a
study period of 8 years. Are the decisions the
same?
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