An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period. Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is $ The EUAC for outside treatment is $ The most economical alternative is OA. outside treatment OB. in-house treatment (Round to the nearest dollar as positive cash flow.) (Round to the nearest dollar as positive cash flow.) MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is □ (Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is : The most economical alternative is A. outside treatment B. in house treatment (Round to the nearest dollar as positive cash flow.) An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period. Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is $(Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is $ The most economical alternative is OA. outside treatment OB. in-house treatment (Round to the nearest dollar as positive cash flow.)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.1CE
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An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will
allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period.
Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's
MARR is 12%.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The EUAC for in-house treatment is $
The EUAC for outside treatment is $
The most economical alternative is
OA. outside treatment
OB. in-house treatment
(Round to the nearest dollar as positive cash flow.)
(Round to the nearest dollar as positive cash flow.)
Transcribed Image Text:An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period. Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is $ The EUAC for outside treatment is $ The most economical alternative is OA. outside treatment OB. in-house treatment (Round to the nearest dollar as positive cash flow.) (Round to the nearest dollar as positive cash flow.)
MARR is 12%.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The EUAC for in-house treatment is □ (Round to the nearest dollar as positive cash flow.)
The EUAC for outside treatment is :
The most economical alternative is
A. outside treatment
B. in house treatment
(Round to the nearest dollar as positive cash flow.)
An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will
allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period.
Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's
MARR is 12%.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The EUAC for in-house treatment is $(Round to the nearest dollar as positive cash flow.)
The EUAC for outside treatment is $
The most economical alternative is
OA. outside treatment
OB. in-house treatment
(Round to the nearest dollar as positive cash flow.)
Transcribed Image Text:MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is □ (Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is : The most economical alternative is A. outside treatment B. in house treatment (Round to the nearest dollar as positive cash flow.) An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $20,000 the first year, but process improvements will allow the annual cost to decline by $2,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $9,000 and an annual fixed price of $7,000/year throughout the 15 year period. Either way, there is no need to treat the wastes after 15 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. The EUAC for in-house treatment is $(Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is $ The most economical alternative is OA. outside treatment OB. in-house treatment (Round to the nearest dollar as positive cash flow.)
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