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3. XYZ district cooling plant plan to purchase a plate heat exchanger (HEX) to replace the existing HEX. The HEX is used as a cooling
3. XYZ district cooling plant plan to purchase a plate heat exchanger (HEX) to replace the existing HEX. The HEX is used as a cooling energy transfer medium between the cooling energy from primary loop to secondary loop of the chilled water system of the plant. The HEX cost is RM500,000. Annual routine maintenance cost from year 2 until year 12 is expected to be RM10,000. Every 5 years starting at the end of year 5 until end of year 10, the HEX is required to undergo major service and each service is expected to cost RM50,000, The HEX is expected to be used for 12 years and at the end of year 12, the HEX can be sold at 10 per cent of original value. Expected annual revenue from the sale of chilled water from year 2 until year 12 is RM500,000. Other annual operating cost from year 2 to year 12 is RM200,000. The interest rate is 10% per year. a) Draw a cash flow diagram for the HEX. b) Based on the cash flow diagram in part (a), formulate and evaluate PW of the project. c) Determine the annual worth of the project. d) Determine the future worth of the project [40 marks]
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