Question

In: Economics

Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...

Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below:

THICKNESS

INSTALLATION COST

ANNUAL SAVINGS

MAINTENANCE ONCE IN EACH 2 YEARS

2cm

$125000

$62000

$4800

5cm

$408000

$125000

$0

a.) Useful lives of both alternatives are 8 years. Which thickness would you recommend for a MARR= 9% per year and negligible market (salvage) values using Present Worth Analysis and Annual Worth Analysis? (Use repeatability assumption)

IN EXCEL PLZ!!

Solutions

Expert Solution

Solution :-

On the basis of Present Worth Analysis Choose 5 cm thickness .

(ii)

Now Annual Worth = Present Worth / PVAF ( r , n )

Thickness 2 cm = $205,447.2 / PVAF ( 9% , 8 )

= $205,447.2 / 5.535

= $37,119.05

Thickness 5 cm = $283,852.4 / PVAF ( 9% , 8 )

= $283,852.4 / 5.535

= $51,284.85

On the basis of Annual Worth Analysis Choose 5 cm thickness

If there is any doubt please ask in comments

Thank you please rate

Rahul Sunny answered 9 months ago
Next > < Previous

Related Solutions

Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below: Q: Useful life of 2 cm Thickness alternative is 10 years and useful life of 5 cm thickness alternative is 5 years. Which thickness would you recommend for a MARR= 0.13 per year and negligible market (salvage) values using a)Present Worth Analysis? b) Annual Worth Analysis? (Use...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below: Thickness Installation cost Annual savings Maintenace once in each 2 years 2cm $222000 $80000 $3400 5cm $360000 $151000 0 a.) Useful lives of both alternatives are 6 years. Which thickness would you recommend for a MARR= 9% per year and negligible market (salvage) values using Annual Worth...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below: THICKNESS INSTALLATION COST ANNUAL SAVINGS MAINTENANCE ONCE IN EACH 2 YEARS 2cm $125000 $62000 $4800 5cm $408000 $125000 $0 d.) Useful lives of both alternatives are 8 years. Find the best alternative using Simple Payback Period Method. IN EXCEL PLZ!!
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below: THICKNESS INSTALLATION COST ANNUAL SAVINGS MAINTENANCE ONCE IN EACH 2 YEARS 2cm $125000 $62000 $4800 5cm $408000 $125000 $0 b.) Useful life of 2 cm Thickness alternative is 8 years and useful life of 5 cm thickness alternative is 7 years. Which thickness would you recommend for...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather...
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below: Useful lives of both alternatives are 10 years. Find the best alternative using A) simple payback period method B) discounted payback period when MARR= 0.13 per year. Thickness Installation cost Annual Savings Maintenance once in each 2 years 2 cm $111000 $81000 $4500 5 cm $367000 $125000...
Two plans have been proposed for a high speed passenger rail line between Cincinnati and Cleveland....
Two plans have been proposed for a high speed passenger rail line between Cincinnati and Cleveland. The plans are summarized in the table below. Costs and benefits are in millions of dol­lars. Use benefit-cost ratio analysis with an interest rate of 8% to determine which, if either, of the plans should be accepted. Identical replacement assumption is applicable. Plan A Plan B Econ. Life (Years) 30 15 Salvage Value $20 $15 Annual Benefits $28.5 $22 Annual M&O Cost $4 $2.5...
Two theories have been proposed regarding the aging process: the rate-of-living theory and the evolutionary theory...
Two theories have been proposed regarding the aging process: the rate-of-living theory and the evolutionary theory of aging. Compare and contrast these two theories. Are there any similarities? What are their differences? Which elements are supported by research, and which elements have been refuted?
Two proposals for manufacturing a new product have been proposed to the board of directors of...
Two proposals for manufacturing a new product have been proposed to the board of directors of ‘Salamis’ Ltd. Market research indicates that there is strong demand for the product. Proposal 1: The company will acquire plant costing £900,000. Fixed expenses (other than depreciation) would amount to £570,000 per annum and variable expenses per unit would be £350. Proposal 2: The company will acquire plant costing £800,000. Fixed expenses (other than depreciation) would amount to £240,000 per annum and variable expenses...
a. Describe the two mechanisms that have been proposed to explain the rise in sex steroid...
a. Describe the two mechanisms that have been proposed to explain the rise in sex steroid secretion that occurs at puberty. Explain the possible effects of body fat and intense the positive role of melatonin in reproduction.
As a financial analyst at Delhi Systems you have been asked to evaluate two capital alternatives...
As a financial analyst at Delhi Systems you have been asked to evaluate two capital alternatives submitted by the production department of the firm. Before beginning you analysis. As a small business, Delhi pays corporate taxes at the rate of 35%. The proposed capital project calls for developing new computer software to facilitate partial automation of production in Delhi’s plant. Alternative A has initial software development costs estimated at $185,000, while Alternative B would cost $330,000. Software development costs would...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT