2 A well-established plastics manufacturing company, located in Willington DE, owns and operates a polypropylene production facility that converts the propylene from one of its cracking facilities to polypropylene plastics for outside sale on a global basis. The polypropylene production facility is currently forced to operate at less than capacity due to an insufficiency of propylene production capacity in its hydrocarbon cracking facility. The chemical engineers are considering alternatives for supplying the additional propylene to the polypropylene production facility. Two feasible alternatives are: 1) to build a pipeline to the nearest outside supply source, 2). or to obtain additional propylene by truck from an outside source. O The team of project engineers and chemical engineers dutifully gathered the following projected cost estimates: Future costs for purchased propylene excluding delivery is $0.215 per lb Cost of pipeline construction is $200,000 per pipeline mile Estimated length of pipeline is 180 miles Transportation costs by tank truck is $0.05 per Ib utilizing a common carrier Pipeline operating costs is $0.005 per Ib excluding capital costs Project additional propylene needs are 180 million lb per year. Projected project life is 20 years Estimated salvage value of the pipeline is 8% of installed cost a) Determine the propylene cost per pound under each option if the firm's MARR is 18% b) Also, which option is more economical