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An engineer, Dr. Daka, has discovered a method of converting cellulose material, such as sugar-cane bagasse, into ethanol that can be used as a green
An engineer, Dr. Daka, has discovered a method of converting cellulose material, such as sugar-cane bagasse, into ethanol that can be used as a green fuel. Dr. Daka has developed three different flow sheets for the arrangement of the equipment and sequencing of the chemistry. The costs for each of these alternatives are given in the table below: Alternative Capital cost Operating cost Value of fertilizer sales 1 50,000 5,300 21,000 2 62,000 6,700 28,000 3 70,000 7,600 31,000 The discount rate is 9% and the life of the operation is 9 years. (1) (ii) Determine the preferred choice without taxes. If the capital equipment is depreciated on a straight-line basis over nine years, and tax is levied at 37%, determine the preferred choice
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