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Biosys water engineering Inc. plan to construct water purification plant in Kalona lowa, to supply portable water to 40,000 Iowa homes. Biosys will spend $230
Biosys water engineering Inc. plan to construct water purification plant in Kalona lowa, to supply portable water to 40,000 Iowa homes. Biosys will spend $230 million in constructing the plant and s135000 per year in operating it. If a salvage value of 20% of the initial cost is estimated at the end of the project the other to run the project for 12 years before they transfer the operation to the county government. A complete overhaul of the plant will be carried out at the end of at an extra year 4 cost of s54200. Considering an interest rate of 7% per year: a) Determine the engineering economy symbols and their value for each option. b) Construct the cash flow diagram c) Calculate the annual equivalent cost of the project d) What is the Present worth of the project Problem 2 points) Don Garlits is a landscaper. He is considering the purchase of a new commercial lawn mower. Two machines are being considered, the Atlas and the Zippy. MARR-12% Zippy Atlas Initial cost, -46,000 Annual operating and 7,600 1100 maintenance cost, S per year Annual incomes per year 22,000 47,000 Salvage value, 5,000 10,000 Life, years Skip the Do-Nothing and proceed straight to comparing the two options a) Generate Incremental Cash Flow Estimates Table b) Construct the Incremental Cash Flow Diagram for the Annual Worth. c) Determine the Incremental cash flow equation
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