Answered: Evaluate a combined cycle power plant…

Evaluate a combined cycle power plant on the basis of the PW method when he MARR is 12% per year. Pertinent cost data are shown in the table. Should

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

Investment Cost
Useful Life
15 years
Market Value, aka salvage value (EOY 15) 3,000
Annual Operating Expenses
Overhaul cost--EOY 5
Overhaul cost--EOY10
('000s of $)
13,000
$19,553,380. NO.
1,000
$19,210,488. YES
200
Evaluate a combined cycle power plant on the basis of the PW method when
the MARR is 12% per year. Pertinent cost data are shown in the table. Should
the plant be built?
550
$19,553,380. Impossible to say without additional information.
O $19,210,488. Impossible to say without additional information.

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