An oil company is planning to install a new 80 mm pipeline to connect storage tanks to a processing plant 1500 m away. The connection will be needed for the foreseeable future. Refer to their costs incurred below: initial cost: RM15,000 service life: 12 years salvage value: RM200 one-off saving in year 8: RM 300 annual profit: RM400 annual pump operation hours: 450 hours pump cost per hours: RM2.50 Calculate the single project evaluation using Benefit Cost Ratio PW analysis method, which is preferred if the MARR is 7%. Draw the cashflow diagram.
An oil company is planning to install a new 80 mm pipeline to connect storage tanks to a processing plant 1500 m away. The connection will be needed for the foreseeable future. Refer to their costs incurred below: initial cost: RM15,000 service life: 12 years salvage value: RM200 one-off saving in year 8: RM 300 annual profit: RM400 annual pump operation hours: 450 hours pump cost per hours: RM2.50 Calculate the single project evaluation using Benefit Cost Ratio PW analysis method, which is preferred if the MARR is 7%. Draw the cashflow diagram.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An oil company is planning to install a new 80 mm pipeline to connect storage
tanks to a processing plant 1500 m away. The connection will be needed for the
foreseeable future. Refer to their costs incurred below:
initial cost: RM15,000
service life: 12 years
salvage value: RM200
one-off saving in year 8: RM 300
annual profit: RM400
annual pump operation hours: 450 hours
pump cost per hours: RM2.50
Calculate the single project evaluation using Benefit Cost Ratio PW analysis
method, which is preferred if the MARR is 7%. Draw the cashflow diagram.
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