A company is considering recycling its waste to generate saturated steam for its processing plant, assume N=20 and I=5%

(work in millions $)

Using net present value of cost, is recycling feasible?

Current system: Initial cost = 0 (sunk);

annual operating cost= 1 million $;

waste disposal per year = 1/2 million;

salvage value = 0

Proposed system initial cost = 3 million;

annual operating cost, 1/4 million,

waste disposal .1 million/yr.,

salvage value .05 million