Chapter 6, Problem 13P

The alternatives for an engineering project to recover most of the energy presently being lost in the primary cooling stage of a chemical processing system have been reduced to three designs. The estimated capital investment amounts and annual expense savings are as follows:

Assume that the MARR is 12% per year, the study period is six years, and the market value is zero for all three designs.

^a After year one, the annual savings are estimated to increase at the rate of 6% per year.

^b After year one, the annual savings are estimated to increase $150 per year.

^c Uniform sequence of annual savings.

Apply an incremental analysis method to determine the preferred alternative. (6.4)