In a cold storage plant, it is desired to determine whether to use insulation two inches thick or three inches in insulating the walls of the cold storage warehouse. Heat absorbed through the walls without insulation would cost P96.00 per year per square meter. Two-inch insulation will cost P30.40 per square meter and will cut out 89% of the loss. Three-inch insulation will cut out92% of the loss and will cost P65.00 per square meter. Using life of 15 years for the insulation with no salvage value and a minimum attractive return of 8%, what thickness of insulation should be used?
In a cold storage plant, it is desired to determine whether to use insulation two inches thick or three inches in insulating the walls of the cold storage warehouse. Heat absorbed through the walls without insulation would cost P96.00 per year per square meter. Two-inch insulation will cost P30.40 per square meter and will cut out 89% of the loss. Three-inch insulation will cut out92% of the loss and will cost P65.00 per square meter. Using life of 15 years for the insulation with no salvage value and a minimum attractive return of 8%, what thickness of insulation should be used?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In a cold storage plant, it is desired to determine whether to use insulation two inches thick or three inches in insulating the walls of the cold storage warehouse. Heat absorbed through the walls without insulation would cost P96.00 per year per square meter. Two-inch insulation will cost P30.40 per square meter and will cut out 89% of the loss. Three-inch insulation will cut out92% of the loss and will cost P65.00 per square meter. Using life of 15 years for the insulation
with no salvage value and a minimum attractive return of 8%, what thickness of insulation should be used?
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