Question
Longhorn energy is planning a $340 Million expansion of two major pipelines in Texas. The Austin- based pipeline company will add 56 miles of 36-
Longhorn energy is planning a $340 Million expansion of two major pipelines in Texas. The Austin- based pipeline company will add 56 miles of 36- inch pipeline and 20,000horsepower of compression.The expansion will increase the capacity of the Katy pipeline in southeast Texas to more than 1.1 billion cubic feet per day from 700,000million cubic feet per day . Net revenue per cubic foot is $1.25 and the pipeline is expected to have a resale value of 28 million at the end of year 38. Determine the capacity recovery cost of this investment if the minimum attactive rate of return is 14% per year ( ISBN: 978-0133439274 Engineering economy sixteenth edition )
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started