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An engineer working for a company with a chemical plant is considering two different liners for an evaporation pond that will receive waste water from

An engineer working for a company with a chemical plant is considering two different liners for an evaporation pond that will receive waste water from the plant. He found two options and want to make use of a Present Worth comparison analysis to decide which alternative will be the more cost effective solution. The interest rate to be used in the comparison is 8% per year.

The evaporation pond has an area of 532,400 square-meter that need to be covered and a plastic liner that he could identify, costs R125 per square-meter (installed). The life-time of the plastic liner is 15 years and at that time precipitated solids will have to be removed at a cost of R5million before it can be replaced this cost DO NOT need to be repeated at the end of the LCM. As alternative he identified a rubberized elastomeric liner that is tougher and has an expected life of 30 years but the initial cost to install this liner will be R198 per square-meter.

Calculate the Present Worth of the cost of the plastic liner over the LCM period - Select the correct answer from the table below (rounded):

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