13. Problem 555 A city has developed a plan to provide for future municipal water needs. The plan proposes an aqueduct that passes through 150 meters oftunnel in a nearby mountain. Two alternatives are being considered. The first proposes to build a full-capacity tunnel now for $555,000. The second proposes to build a half- capacity tunnel. The maintenance cost of the tunnel lining for the full-capacity tunnel is $40,000 every 10 years, and for each halfcapacity tunnel it is $32,000 every 10 years. The friction losses in the half-capacity tunnel will be greater than in the full-capacity tunnel. The estimated additional pumping costs in the single halfcapacity tunnel will be $2,000 a year, and for the two half-capacity tunnels it will be $4,000 a year. On the basis of capitalized cost and a 7% interest rate, which alternative should be selected? 14. Problem 570 A cost analysis is to be made to determine what, if anything, should be done in a situation offering three \"do-something" and one "do-nothing" alternatives. Estimates of the cost and benefits are as follows: Alternatives Cost [S] Uniform Annual EndofUsefui Life Useful Life {years} Benefit [5} Salvage Value [3} Use a 10year analysis period for the four mutually exclusive alternatives. At the end offive years, Alternatives 1 and 2 may be replaced with identical alternatives (with the same cost, benefits, salvage value, and useful life}. {a} If an 8% interest rate is used, which alternative should be chosen? {b} If a 12% interest rate is used, which alternative should be chosen? 15. Problem 5124 A steam boiler is needed as part of the design of a new plant. The boiler can be fired by natural gas, fuel oil, or coal. A decision must be made on which fuel to use. An analysis of the costs shows that the installed cost, with all controls, would be least for natural gas at $30,000; forfuel oil it would be $55,000; and for coal it would be $180,000. If natural gas is used rather than fuel oil, the annual fuel cost will increase by 37,500. If coal is used rather than fuel oil, the annual fuel cost will be $15,000 per year less. Assuming 8% interest, a 20year analysis period, and no salvage value. which is the most economical installation