Question
At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? Interest rate is 4%, and the analysis period is
At what price (dollars per pound) of chemicals for system 2 are the two options equivalent? Interest rate is 4%, and the analysis period is 20 years. Solve using annual cash flow analysis.
| System 1 | Sysetm 2 | |
|---|---|---|
| Initial cost | 254000 | 472000 |
| Annual Chemical Cost | 47000 | Unknown |
| Lifetime (years) | 20 | 20 |
Part 1
At what price (dollars per pound) of chemicals for system 2 are the two options equivalent?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To compare the two systems we need to calculate the present value PV of the cash ...
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Step: 2
Step: 3
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Microeconomics
Authors: Michael Parkin
12th edition
133872297, 133872293, 978-1292094632
