PLANT DESIGN AND ECONOMICS FOR CHEMICAL ENGINEERS

PROBLEM 12 A furnace installation A costing $12,000 with operating costs of $4800 per year and a 10-year life is offered by one supplier. A second alternative guarantees to provide the same service with s1,000 a year lower operating costs at a cost of $25,000. Salvage Value on both furnaces is estimated at $1000 for an interest rate of 8%. How many years of service are required for option B to have annual cost equal to that of option A's? What would be the number years of service if time value of money were neglected and straight-line depreciation were used