An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $30,000 the first year, but process improvements will allow the annua cost to decline by $3,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $15,200 and an annual fixed price of $13,200/year throughout the 10 year period. Either way, there is no need to treat the wastes after 10 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 10%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The EUAC for in-house treatment is $. (Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is $. (Round to the nearest dollar as positive cash flow.) The most economical alternative is O A. in-house treatment OB. outside treatment

An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. In-house treatment will have an annual cost of $30,000 the first year, but process improvements will allow the annua cost to decline by $3,000 each subsequent year. As an alternative, an outside company will process the wastes for an initial cost of $15,200 and an annual fixed price of $13,200/year throughout the 10 year period. Either way, there is no need to treat the wastes after 10 years. Using the AW method, calculate the equivalent uniform annual cost (EUAC) of each alternative and determine how the waste should be processed. The company's MARR is 10%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. The EUAC for in-house treatment is $. (Round to the nearest dollar as positive cash flow.) The EUAC for outside treatment is $. (Round to the nearest dollar as positive cash flow.) The most economical alternative is O A. in-house treatment OB. outside treatment

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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