A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm. A small pipelinewill cost less to purchase (inclucding valves and other appurtenances) but will have a high head loss and, therefore, a higherpumping cost. The small pipeline will cost $17 million installed and will have an operating cost of $12,000 per month. Alarger-diameter pipeline will cost $21 million installed, but its operating cost will be only $8000 per month. Assume thesalvage value is 10% of the first cost for each pipeline at the end of the 10-year study period. Determine the equivalentannual worth of the small pipieline at a MARR of 12% per year compounded monthly. (Answer should be per month)

Equivalent monthly cost is total cost of machine and monthly operating cost that is required for…

A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm A small pipeline will cost less to purchase including valves and other appurtenances) but will have a high head loss and, therefore, a highen pumping cost The small pipeline will cost $17 million installed and will have an operating cost of $12,000 per month larger-diameter pipeline will cost $2 million installed, but its operating cost will be only $8000 per month. Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10-year study period. Determine the equivalent annual worth of the small pipieline at a MARR of 12% per year compounded monthly. Answer should be per month)

A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm A small pipeline will cost less to purchase including valves and other appurtenances) but will have a high head loss and, therefore, a highen pumping cost The small pipeline will cost $17 million installed and will have an operating cost of $12,000 per month larger-diameter pipeline will cost $2 million installed, but its operating cost will be only $8000 per month. Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10-year study period. Determine the equivalent annual worth of the small pipieline at a MARR of 12% per year compounded monthly. Answer should be per month)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 1nM

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