(a)
The methods to be used to produce the biofuels.
Answer to Problem 43P
The algae are good for the making of biofuels.
Explanation of Solution
Given:
Number of barrels of ethanol to be sold per year is
The time period is
The oil firm will pay NPB
The NPB uses an interest rate of
Annual increase in O&M cost is
Annual increase in raw material cost is
Calculation:
Calculate the revenue earned in the next
Calculate the annual amount.
Write the equation for the factor
Here, annual cost is A, present worth is P, rate of interest is i, and number of year is n.
Calculate the factor
Substitute
Calculate the factor
Substitute
Substitute
Therefore, the benefit from payment received for both alternatives is
Alternative Corn
Calculate the annual cost.
Here, future value is F.
Substitute
Therefore, salvage value will be
Calculate the equivalent uniform annual benefit (EUAB) which is the sum of total revenue earned during the first three years, next ten year plus the salvage value.
It is required to calculate the annuity value of the corn alternative after
Calculate the factor
Substitute
Substitute
Therefore, the value of land after
Calculate the annuity value of facility construction cost.
Substitute
Therefore, the construction cost after
Annual O&M expenses starting from the year
Calculate the factor
Substitute
Substitute
Raw materials expenses starting from the year
Substitute
Calculate the equivalent uniform annual cost (EUAC) which is sum of land purchasing cost, amount spent in construction, annual O&M expenses, and cost of raw material.
Calculate the Equivalent uniform annual worth.
Substitute
Alternative Algae
Calculate the annual cost.
Substitute
Calculate the equivalent uniform annual benefit (EUAB) which is sum of total revenue earned during first three year, next ten year plus salvage value.
It is required to calculate the annuity value of land of algae alternative after
Substitute
It is required to calculate the annuity value of construction facility of algae alternative after
Substitute
Annual O&M expenses starting from the year
Substitute
Raw material expenses starting from the year
Substitute
Calculate the equivalent uniform annual cost (EUAC) which is sum of land purchasing cost, amount spent in construction, annual O&M expenses, and cost of raw material.
Calculate the Equivalent uniform annual worth.
Substitute
Conclusion:
The equivalent uniform annual worth for algae is more than that for corn.
Therefore, the algae are good for the making the biofuels.
(b)
The properties, types and use of the biofuels.
Explanation of Solution
Biofuels:
The fuel derived from the biomass product such as plants, fiber, algae, and animal waste is known as biofuels. Biofuels are renewable energy sources. They are the best alternatives for fossil fuels and petroleum products.
Ethanol and biodiesel are the final products of the biofuels and these products are blended with the gasoline which can be used as fuel in the automotive industries.
Pros of biofuels:
- Biofuels are less expensive.
- Large availability of source materials.
- Renewability.
- Economic stimulation.
- Low carbon emission.
Cons of bifuels:
- Biofuels have low energy outputs.
- Refined biofuels are more expensive because of high energy outputs.
- Biofuels are also responsible for increase in food prices.
- Biofuels are also responsible for shortage of food.
- Large amount of water is used in its production.
Non-auto industry uses of biofuels:
- Used for energy generation.
- Provide heat.
- Charging electronics.
- Used to clean oil spills and grease.
- Used in cooking
- As a lubricant.
- Used to remove paints and adhesives.
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Chapter 6 Solutions
ENGR.ECONOMIC ANALYSIS W/DASHBOARD
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