8-41. A gas-fired heating unit is expected to meet an annual demand for thermal energy of 500...

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8-41. A gas-fired heating unit is expected to meet an annual demand for thermal energy of 500 million Btu, and the unit is 80% efficient. Assume that each 1,000 cubic feet of natural gas, if burned at 100% efficiency, can deliver one million Btu. Further suppose that natural gas is now selling for $7.50 per 1,000 cubic feet. What is the PW of fuel cost for this heating unit over a 12-year period if natural gas prices are expected to increase at an average rate of 10% per year? The firm’s MARR (= im) is 18% per year. (8.7)

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Engineering Economy

ISBN: 9780134870069

17th Edition

Authors: William Sullivan, Elin Wicks, C Koelling

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