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4. (15 points) A city wastewater treatment plant is working on a project to reclaim energy from waste methane generated by the plant's anaerobic digester.
4. (15 points) A city wastewater treatment plant is working on a project to reclaim energy from waste methane generated by the plant's anaerobic digester. The project cost is anticipated at $2,100,000. The digester will cost $60,000 per year to operate. The digester will require major rebuilding at year 10 and year 20 at a cost of $200,000 per rebuild. The project will generate energy cost savings to the plant of $325,000 per year. The project life is 30 years, there is no significant salvage value at project end. Use CONVENTIONAL BENEFIT-COST ANALYSIS to determine whether the project is worth pursuing. Use a MARR of 15%
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