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 $40,000 the first year, but process improvements will allow the costs to decline by $4,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $20,000/year throughout the 11 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 11 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 11%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. The AW of the in-house treatment is $. (Round to the nearest dollar.)

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 $40,000 the first year, but process improvements will allow the costs to decline by $4,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $20,000/year throughout the 11 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 11 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 11%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. The AW of the in-house treatment is $. (Round to the nearest dollar.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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. The treatment will cost $20,000 the first year, but process improvements will allow the costs to decline by $2,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $10,000/year throughout the 7 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 7 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 14%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 14% per year. The AW of the in-house treatment is $ (Round to the nearest dollar.)
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