A water resources engineer is considering two alternatives to a water treatment process. Details about the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A water resources engineer is considering two alternatives to a water treatment process. Details about the cost and benefits associated with the two options are summarized in Table 2 below. Assume an interest rate of 6% and determine the best option using: a). Present worth analysis - develop cash flow diagrams for both options and use the common multiple of design lives approach; b). Annual cash flow analysis - convert the individual cost items separately (not the entire present cost for each option in one step). Table 2. Water treatment process options Option A Option B 15,000 35,000 9,000 in Y 1, 7,000 in Y1, then increasing at 3%/yr. then increasing by 325/yr. 10,000 2,000 6 years 12 years *Note that the annual operation and maintenance costs for both options depend on the age of the facility and will return to their initial value if the facility is rebuilt. Option # Investment cost Annual O&M costs* Salvage value at the end of design life Design life A water resources engineer is considering two alternatives to a water treatment process. Details about the cost and benefits associated with the two options are summarized in Table 2 below. Assume an interest rate of 6% and determine the best option using: a). Present worth analysis - develop cash flow diagrams for both options and use the common multiple of design lives approach; b). Annual cash flow analysis - convert the individual cost items separately (not the entire present cost for each option in one step). Table 2. Water treatment process options Option A Option B 15,000 35,000 9,000 in Y 1, 7,000 in Y1, then increasing at 3%/yr. then increasing by 325/yr. 10,000 2,000 6 years 12 years *Note that the annual operation and maintenance costs for both options depend on the age of the facility and will return to their initial value if the facility is rebuilt. Option # Investment cost Annual O&M costs* Salvage value at the end of design life Design life
Expert Answer:
Answer rating: 100% (QA)
To determine the best option using present worth analysis and annual cash flow analysis well calcula... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
Students also viewed these accounting questions
-
Using the Borda count method, which restaurant is chosen? The members of the Student Council at Ohio State University are planning to go out to dinner following an upcoming meeting. The restaurant...
-
Using the pairwise comparison method, which restaurant is chosen? The members of the Student Council at Ohio State University are planning to go out to dinner following an upcoming meeting. The...
-
Repeat Prob. 3120 with d = 0.75 in, F = 750 lbf, L = 10 in, and Di = 2.5 in. Repeat Prob. 3120, A utility hook was formed from a round rod of diameter d = 20 mm into the geometry shown in the figure....
-
ABC Company produces mode trains. During the month of July, it produced 4,000 trains. The actual labor hours were 8 hours per train. Its standard labor hours are 10 hours per train. The standard...
-
Yesteryear Productions pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $0.40 a share for two years commencing four years from today. After...
-
Use the Kruskal-Wallis test procedure to analyze the data in DS 11.1.2. (a) Find the ranks rtj and the average ranks 1., 2., 3, and 4.. (b) What is the value of the test statistic H? (c) Write down...
-
Jade Soon, the administrator of General Hospital, is interested in obtaining more accurate cost allocations on the basis of cause and effect. The $180,000 of laundry costs has been allocated on the...
-
Super Savers Department Store reported a quick ratio of 0.6. A review of its balance sheet revealed the following information: Quick assets ..... $120,000 Current assets .... 750,000 Noncurrent...
-
Hi there, thank you for the response, I just had a question, if there were four slots instead of three, what would the steps be ?
-
8. In class we discussed the following example: Current ratio Year 3 Year 2 Year 1 Unaudited 5 3 3 In the beginning stage of an auditor, the above ratio might suggest to the auditor which of the...
-
Leather Goods Company began the year with inventory of \(\$ 50,000\) and purchased \(\$ 250,000\) of goods during the year. Sales for the year are \(\$ 500,000\), and Leather Goods' gross profit...
-
You are the senior on an audit engagement. One of the staff accountants asks you why the public accounting firm for which you both work has established a report review department since the staff...
-
Carpetmaster began the year with inventory of \(\$ 350,000\). Inventory purchases for the year total \(\$ 1,600,000\), and cost of goods sold will be \(\$ 1,750,000\). How much is Carpetmaster's...
-
A Ltd., a manufacturing company with total assets of about $7 million and 500,000 shares outstanding, is situated just outside a medium-sized Canadian city. In early 19X9, the local newspaper...
-
After the purchase on June 22, what is Amazon's cost of the inventory on hand? Amazon uses FIFO. a. \(\$ 300\) b. \(\$ 740\) c. \(\$ 440\) d. \(\$ 720\)
-
The following data from the just completed year are taken from the accounting records of Mason Company: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses...
-
The MIT Sloan School of Management is one of the leading business schools in the U.S. The following table contains the tuition data for the masters program in the Sloan School of Management. a. Use...
-
Discuss the role of the Federal Trade Commission (FTC) and the major enforcement sanctions that it may use.
-
Brian Hanson sustained a paralyzing injury while playing in a lacrosse match between Ohio State University and Ashland University. Hanson had interceded in a fight between one of his teammates and an...
-
Discuss the liability of makers, acceptors, drawees, drawers, indorsers, and accommodation parties.
-
When it comes to translating the financial statements of entities in highly inflationary countries, which of the following approaches makes more sense and why? a. Remeasure using the temporal method,...
-
Why do currency differences affect foreign exchange reporting?
-
Why do German and French approaches to reporting foreign exchange gains and losses differ from those in the United Kingdom?
Study smarter with the SolutionInn App