Please Show Work and formulas used inExcel3. A local college is installing steam pipes on their campus and must decide what insulation to use. If no insulationis used, it has been estimated that the heat loss per foot will be $2.10. If 1-inch thick insulation is used, 70% of theheat loss will be eliminated. If 2-inch thick insulation is used, 84% of the heat loss will be eliminated. The 1-inchthick insulation costs $0.30 per foot to install, and the 2-inch thick insulation costs $0.80 per foot to install. Thecampus has 230,000 ft of steam pipe on campus, and a MARR=10%. Assume the insulation has a life of 10 years.(a) Calculate the present worth (PW) of all alternatives.(b) Calculate the future worth (FW) of all alternatives.(c) Calculate the annual worth (AW) of all alternatives.(d) Rank the alternatives by any of the above metrics. Explain your choice using one of the ranking methods(PW/FW/AW), as if you were talking to your boss, a non-engineering economist.(e) What would the company's MARR need to be for options 1 and 2 to be economically equivalent?(f) What would the school's MARR need to be for no insulation to be economically equivalent to option 1?

Note: This question has several subparts. The first three have been answered below.

Answered: Please Show Work and formulas used in…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 13E

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Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.50 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.40 per foot. A 2-inch thick insulated covering will eliminate 92% of the loss and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 250,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10%/year return to justify capital expenditures. The insulation has a life expectancy of 10 years. Determine which insulation (if any) should be purchased using a ranking present worth analysis.
Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation 1-inch thick or 2-inches-thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.50 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.40 per foot. A 2-inch thick insulated covering will eliminate 92% of the loss and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 250,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10%/yr return to justify capital expenditures. The insulation has a life expectancy of 10 years. Determine which insulation (if any) should be purchased using an internal rate of return analysis.
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