Question
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $ 374,000, and annual maintenance costs are estimated to be $ 6,400 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $ 198,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $ 14,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value. MARR is 20 %/year.
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