The City of Zamboanga contemplates to increase the capacity of the existing water transmission lines. Two plans are under consideration. Plan A requires the construction of a parallel pipeline, the flow being maintained by gravity. The initial cost of the pipeline is P2,750,875 and the life of 40 years and will have a salvage value of P285,874, with an annual operating cost of P6,875 and maintenance cost of P10,845. Plan B requires the construction of a pipeline costing P2,002,369 with the life of 40 years. Plan B requires pumping equipment which cost an additional amount of P358,745, it has a life of 10 years and an annual operating cost of P22,954 and maintenance cost of P14,532. Assuming interest rate is 12.354%, determine the following: A.)Present worth of Plan B. B.)Annual Cost of Plan A. C.)Equivalent Uniform Annual Cost of Plan B. ( please provide detailed solution not in excel, I'm in rush i will 100% guarantee to you that i will vote it up for your effort, thank you.)
The City of Zamboanga contemplates to increase the capacity of the existing water transmission lines. Two plans are under consideration. Plan A requires the construction of a parallel pipeline, the flow being maintained by gravity. The initial cost of the pipeline is P2,750,875 and the life of 40 years and will have a salvage value of P285,874, with an annual operating cost of P6,875 and maintenance cost of P10,845. Plan B requires the construction of a pipeline costing P2,002,369 with the life of 40 years. Plan B requires pumping equipment which cost an additional amount of P358,745, it has a life of 10 years and an annual operating cost of P22,954 and maintenance cost of P14,532. Assuming interest rate is 12.354%, determine the following: A.)Present worth of Plan B. B.)Annual Cost of Plan A. C.)Equivalent Uniform Annual Cost of Plan B. ( please provide detailed solution not in excel, I'm in rush i will 100% guarantee to you that i will vote it up for your effort, thank you.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The City of Zamboanga contemplates to increase the capacity of the existing water transmission lines. Two plans are under consideration. Plan A requires the construction of a parallel pipeline, the flow being maintained by gravity. The initial cost of the pipeline is P2,750,875 and the life of 40 years and will have a salvage value of P285,874, with an annual operating cost of P6,875 and maintenance cost of P10,845. Plan B requires the construction of a pipeline costing P2,002,369 with the life of 40 years. Plan B requires pumping equipment which cost an additional amount of P358,745, it has a life of 10 years and an annual operating cost of P22,954 and maintenance cost of P14,532. Assuming interest rate is 12.354%, determine the following:
A.)Present worth of Plan B.
B.)Annual Cost of Plan A.
C.)Equivalent Uniform Annual Cost of Plan B.
( please provide detailed solution not in excel, I'm in rush i will 100% guarantee to you that i will vote it up for your effort, thank you.)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 8 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education