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Problem 2 Groundwater well is known to begin pumping sand once it becomes exploited (old), and this may damage the subsequent water treatment processes. To
Problem 2 Groundwater well is known to begin pumping sand once it becomes exploited (old), and this may damage the subsequent water treatment processes. To solve this problem, two alternatives are proposed: A new well can be drilled at a capital cost of $580,000 with minimal operating and maintenance expenses of $11,500 per year. A settling tank can be constructed ahead of the treatment processes which will cost $230,000 to build and $42,400 per year to operate and maintain. The salvage value of either option at EOY 20 is 10% of the capital investment (the capital investment is depreciated linearly over the 20-year lifetime of the investment). Using a MARR of 5%: (a) Which alternative is better for the 20-year study period? (b) Use a spreadsheet solver to determine a study period that will make the two alternatives equally acceptable (it is okay if the number of years is not an integer, you can also use a trial and error process followed by interpolations. However, the spreadsheet would be easier and will save time (Spreadsheet answer would be preferable])
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