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In a chlorine-fluxing installation in a large aluminum company, engineers are considering the replacement of existing plastic pipe fittings with more expensive but longer lived,

In a chlorine-fluxing installation in a large aluminum company, engineers are considering the replacement of existing plastic pipe fittings with more expensive but longer lived, copper fittings. the following table gives a comparison of the capital investments, lives, salvage values, and so on of the two mutually exclusive alternatives under consideration:

plastic copper
capital investment $5000 $10000
useful life 5 years 10 years
salvage value for depreciation purposes (after 5 years) $1000 (after 10 years) $5000
annual expenses $300 $100
market value at end of useful life $0 $0

Depreciation amounts are calculated with the SL method. assume an income tax rate of 40% and an after-taxes MARR of 12% per year. which pipe fitting would you select and why? carefully list all assumptions that you make in performing the analysis.

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