Officials of Arley County, one of the fastest growing counties in the country, are looking for...

Officials of Arley County, one of the fastest growing counties in the country, are looking for ways to expand their sewer system. They are considering two alternative sewer designs. Data for the two alternatives is given below. The interest rate is 6%. Which design should they select? Use the equivalent uniform annual worth method.

Design 1: Lift station, shallow installation

Installation Cost: $450,000
Operations and Maintenance: $15,000 per year for years 1-3, increasing by $1,050/year every

year thereafter (i.e, $16,050 @ EOY4, $17,100 @ EOY5, etc.) Salvage Value: $75,000 @ EOY 20

Design 2: Gravity flow, deep installation

Installation Cost: $650,000
Operations and Maintenance: $2,000/year Salvage Value: $45,000 @ EOY 25

Solutions

Expert Solution

DESIGN-II IS SELECTED BASED ON THE EQUIVALENT UNIFORM ANNUAL WORTH(EUAW)

ekkarill92 answered 1 year ago

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