for discrete compoung(Round to the nearesl deltreatment in S Round to the nearest dollar)processing is the most economical altemativeA More InfoDiscrete Compounding; i-5%Single PaymentPent bone

Given, There are two option for the treatment of waste liquids Treatment cost= $20,000 in the first…

An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream The treatment will cost $20,000 the frst year, but process improvements will allow the costs to decline by $2,000 each year As an altemative, an outside company will process the wastes for the fred price of $10 000lyear throughout the 9 year period, payable at the beginning of each year Ether way, there is no need to treat the wastes after 9 years. Use the annual worth method to determine how the wastes should be processed The company's MARR is 6% A Click the icon to view the interest and annulty table for discrete compounding when the MARR is 6% per year

An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream The treatment will cost $20,000 the frst year, but process improvements will allow the costs to decline by $2,000 each year As an altemative, an outside company will process the wastes for the fred price of $10 000lyear throughout the 9 year period, payable at the beginning of each year Ether way, there is no need to treat the wastes after 9 years. Use the annual worth method to determine how the wastes should be processed The company's MARR is 6% A Click the icon to view the interest and annulty table for discrete compounding when the MARR is 6% per year

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

for discrete compoung
(Round to the nearesl del
treatment in S Round to the nearest dollar)
processing is the most economical altemative
A More Info
Discrete Compounding; i-5%
Single Payment
Pent bone

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The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,500,000 $105,000 $199,000 $65,000 $16,000 X-TRUD 13 $2,620,000 $109,000 $614,000 $80,000 $14,500 O Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X is best because it has the lowest M&O cost in yr1 SUPR-X 7 $2,020,000 $117,000 $671,000 $56,000 $11,000 The company's interest rate (MARR) is 4%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $442,101 higher than X and $62,879 higher than X-TRUD. O Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-38,899 higher than X and $-18,121 higher than X-TRUD.
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