Question
a chemical process stream incorporates a carbon steel component generates 2623000 dollar revenue every year general operating and maintenance cost 32000 dollar per year while
a chemical process stream incorporates a carbon steel component generates 2623000 dollar revenue every year general operating and maintenance cost 32000 dollar per year while carbon steel corrosion dictates component replacement every three year at cost of 276000 dollar. using net present value calculation, decide if it worth changing the component to stainless steel which last five years but cost 412000 dollar. the operating and maintenance cost 28000 per year but will cut to 2468000 per year because of reducing heat transfer. assume total life time of the process of 14 years. assume rate is 10%.
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