An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $50,000 the first year, but process improvements will allow the costs to decline by 55,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $25,000/year throughout the 12 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 12 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 5%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per year. The AW of the in-house treatment is S (Round to the nearest dollar.) The AW of the outside treatment is S (Round to the nearest dollar) The processing is the most economical alternative outside in-house
An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $50,000 the first year, but process improvements will allow the costs to decline by 55,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $25,000/year throughout the 12 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 12 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 5%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per year. The AW of the in-house treatment is S (Round to the nearest dollar.) The AW of the outside treatment is S (Round to the nearest dollar) The processing is the most economical alternative outside in-house
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:More Info
Fund
Series
Amount
Factor
Recovery
Factor
Present
Amount
Factor
Present
Worth Factor
Present
Worth Factor
Factor
Worth Factor
Factor
ToFind A
Given P
To Find F
To Find P
Given G
P/G
To Find A
Given G
To Find F
To Find A
Given F
To Find P
To Find P
Given P
Given F
Given A
Given A
F/P
P/F
FIA
PIA
A/F
A/P
A/G
1.0500
0.9524
1.0000
0.9524
1.0000
1.0500
0.0000
0.0000
1.1025
0.9070
2.0500
0.4878
0.3172
1.8594
0.5378
0.9070
0.4878
al
3
1.1576
0.8638
3.1525
2.7232
0.3672
2.6347
0.9675
4.
1.2155
0.8227
4.3101
3.5460
0.2320
0.2820
5.1028
1.4391
1.2763
0.7835
5.5256
4.3295
0.1810
0.2310
8.2369
1.9025
6.
1.3401
0.7462
6.8019
5.0757
0.1470
0.1970
11.9680
2.3579
1.4071
0.7107
8.1420
5.7864
0.1228
0.1728
16.2321
2.8052
8.
1.4775
0.6768
9.5491
6.4632
0.1047
0.1547
20.9700
3.2445
1.5513
0.6446
11.0266
7.1078
0.0907
0.1407
26.1268
3.6758
10
1.6289
0.6139
12.5779
7.7217
0.0795
0.1295
31.6520
4.0991
11
1.7103
0.5847
14.2068
8.3064
0.0704
0.1204
37.4988
4.5144
12
1.7959
0.5568
15.9171
8.8633
0.0628
0.1128
43.6241
4.9219
13
1.8856
0.5303
17.7130
9.3936
0.0565
0.1065
49.9879
5.3215
14
1.9799
0.5051
19.5986
9.8986
0.0510
0.1010
56.5538
5.7133
15
2.0789
0.4810
21.5786
10.3797
0.0463
0.0963
63.2880
6.0973
16
2.1829
0.4581
23.6575
10.8378
0.0423
0.0923
70.1597
6.4736
17
2.2920
0.4363
25.8404
11.2741
0.0387
0.0887
77.1405
6.8423
18
2.4066
0.4155
28.1324
11.6896
0.0355
0.0855
84.2043
7.2034
19
2.5270
0.3957
30.5390
12.0853
0.0827
0.0327
91.3275
7.5569
20
2.6533
0.3769
33.0660
12.4622
0.0302
0.0802
98.4884
7.9030
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Transcribed Image Text:An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $50,000 the first year, but process improvements will allow the costs to decline by 5,000 each year. As an
alternative, an outside company will process the wastes for the fixed price of $25,000/year throughout the 12 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 12 years. Use the annual worth method to
determine how the wastes should be processed. The company's MARR is 5%.
E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per vear.
The AW of the in-house treatment is $ (Round to the nearest dollar.)
The AW of the outside treatment is S. (Round to the nearest dollar)
The
V processing is the most economical alternative.
outside
in-house
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