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As part of the crude-oil refining process in a large crude-oil refinery, a certain heat exchanger must be replaced every year. The replacement and downtime cost in the first year is $80300. This cost is expected to increase due to inflation at a rate of 2% per year for the following five years, at which time this particular heat exchanger will no longer be needed. Assume the companys cost of capital is 6% per year. -
If a higher quality heat exchanger can eliminate these annual replacement and downtime costs, what is the maximum price you can consider? Round off your final answer to nearest thousand. -
In case this higher quality heat exchanger requires an extra annual maintenance cost $4,000 at EOY 1 and is expected to increase $400 for the following five years, what is the maximum price you can consider? Round off your final answer to nearest thousand. |
6% 6% m m 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 6 7 8 9 10 11 12 13 14 15 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Single PIF FIP PIA .9434 1.0600 .9434 .8900 1.1236 1.8334 .8396 1.1910 2.6730 .7921 1.2625 3.4651 .7473 1.3382 4.2124 .7050 1.4185 4.9173 .6651 1.5036 5.5824 .6274 1.5938 6.2098 .5919 1.6895 6.8017 .5584 1.7908 7.3601 .5268 1.8983 7.8869 4970 2.0122 8.3838 .4688 2.1329 8.8527 .4423 2.2609 9.2950 .4173 2.3966 9.7122 .3936 2.5404 10.1059 .3714 2.6928 10.4773 .3503 2.8543 10.8276 .3305 3.0256 11.1581 .3118 3.2071 11.4699 .2942 3.3996 11.7641 .2775 3.6035 12.0416 .2618 3.8197 12.3034 .2470 4.0489 12.5504 .2330 4.291912.7834 .2198 4.5494 13.0032 .2074 4.8223 13.2105 1956 5.1117 13.4062 .1846 5.4184 13.5907 1741 5.7435 13.7648 .1643 6.0881 13.9291 .1550 6.4534 14.0840 .1462 6.8406 14.2302 .1379 7.2510 14.3681 .1301 7.6861 14.4982 .1227 8.1473 14.6210 .1158 8.6361 14.7368 .1092 9.1543 14.8460 .1031 9.7035 14.9491 .09722 10.2857 15.0463 .07265 13.7646 15.4558 .05429 18.4202 15.7619 .04057 24.6503 15.9905 .03031 32.9877 16.1614 ,02265 44.1450 16.2891 .01693 59.0759 16.3845 .01265 79.0569 16.4558 .002947 339.302 16.6175 Series Arith Grad AP FA AF PIG AG 1.0600 1.0000 1.0000 .5454 2.0600 .4854 .8900 .4854 .3741 3.1836 .3141 2.5692 .9612 .2886 4.3746 .2286 4.9455 1.4272 .2374 5.6371 .1774 7.9345 1.8836 .2034 6.9753 .1434 11.4594 2.3304 .1791 8.3938 .1191 15.4497 2.7676 .1610 9.8975 1010 19.8416 3.1952 .1470 11.4913 .08702 24.5768 3.6133 .1359 13.1808 .07587 29.6023 4.0220 1268 14.9716 ,06679 34.8702 4.4213 .1193 16.8699 .05928 40.3369 4.8113 .1130 18.8821 .05296 45.9629 5.1920 1076 21.0151 ,04758 51.7128 5.5635 .1030 23.2760 .04296 57.5546 5.9260 .09895 25.6725 .03895 63.4592 6.2794 .09544 28.2129 .03544 69.4011 6.6240 ,09236 30.9057 .03236 75.3569 6.9597 .08962 33.7600 .02962 81.3062 7.2867 .08718 36.7856 .02718 87.2304 7.6051 .08500 39.9927 .02500 93.1136 7.9151 .08305 43.3923 .02305 98.9412 8.2166 .08128 46.9958 .02128 104.701 8.5099 .07968 50.8156 .01968 110.381 8.7951 .07823 54.8645 01823 115.973 9.0722 .07690 59.1564 .01690 121.468 9.3414 .07570 63.7058 .01570 126.860 9.6029 .07459 68.5281 .01459 132.142 9.8568 ,07358 73.6398 .01358 137.310 10.1032 .07265 79.0582 .01265 142.359 10.3422 .07179 84.8017 .01179 147.286 10.5740 ,07100 90.8898 .01100 152.090 10.7988 .07027 97.3432 .01027 156.768 11.0166 .06960 104.184 .009598 161.319 11.2276 .06897 111.435.008974 165.743 11.4319 .06839 119.121.008395 170.039 11.6298 .06786 127.268.007857 174.207 11.8213 .06736 135.904 .007358 178.249 12.0065 .06689 145.058 .006894 182,165 12.1857 .06646 154.762.006462 185.957 12.3590 .06470 212.744.004700 203.110 13.1413 .06344 290.336 .003444 217.457 13.7964 .06254 394.172 .002537 229.322 14.3411 .06188 533.128 .001876 239.043 14.7909 .06139 719.083.001391 246.945 15.1601 .06103 967.932 .001033 253.327 15.4613 .06077 1300.95 .7687-3 258.453 15.7058 .06018 5638.37 .1774-3 272.047 16.3711 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 26 27 28 29 30 31 32 33 34 35 31 32 33 34 35 36 37 38 39 40 45 50 55 60 65 36 37 38 39 40 45 50 55 60 65 70 75 100 70 75 100
