At the Motorola plant in Mesa, AZ, it is desired to determine whether one-inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from the pipe without any insulation would cost $2.00 per linear foot per year. The one- inch-thick insulation option will eliminate 88% of the heat loss and will cost $0.60 per foot. Two-inch insulation will eliminate 95% of the heat loss and will cost $1.10 per foot. The steam pipe is 1,000 feet in length and will last 10 years. MARR is 6% per year. Which insulation thickness should be recommended? Apply Equivalent Uniform Annual Worth technique. please show all work for
At the Motorola plant in Mesa, AZ, it is desired to determine whether one-inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from the pipe without any insulation would cost $2.00 per linear foot per year. The one- inch-thick insulation option will eliminate 88% of the heat loss and will cost $0.60 per foot. Two-inch insulation will eliminate 95% of the heat loss and will cost $1.10 per foot. The steam pipe is 1,000 feet in length and will last 10 years. MARR is 6% per year. Which insulation thickness should be recommended? Apply Equivalent Uniform Annual Worth technique. please show all work for
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Prob.#1 At the Motorola plant in Mesa, AZ, it is desired to determine whether one-inch-thick insulation or two-inch-thick insulation should be used to reduce heat loss from a long section of steam pipe. The heat loss from the pipe without any insulation would cost $2.00 per linear foot per year. The one- inch-thick insulation option will eliminate 88% of the heat loss and will cost $0.60 per foot. Two-inch insulation will eliminate 95% of the heat loss and will cost $1.10 per foot. The steam pipe is 1,000 feet in length and will last 10 years. MARR is 6% per year. Which insulation thickness should be recommended? Apply Equivalent Uniform Annual Worth technique. please show all work for each type.
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