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Question 2 (10 points) Too late to cancel the project, so now the company needs to decide whether to order the 25,000-gallon holding tank or
Question 2 (10 points) Too late to cancel the project, so now the company needs to decide whether to order the 25,000-gallon holding tank or the 50,000-gallon tank. The added incremental cost for the larger tank over the smaller will be $12,610, and total annual incremental savings of the larger tank over the smaller will be $2513. If the MARR is 15% (compounded annually) and the analysis time frame is 10 years, based on engineering economic analysis, which tank should be ordered? HINT: Use incremental analysis based only on costs and savings given in this question -- do NOT use the WORD printout for this question. It is very close; PW = +$2 (within 10%) for specifying the larger tank. The 50,000-gallon tank is the best choice. Incremental PW = $200 (within 10%) The 25,000-gallon tank is the best choice. Incremental PW = $200 (within 10%) None of the answers are correct, except this one
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