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The Consolidated Oil Company must install antipollution equipment in a new refinery to meet federal clean air standards. Useful of life of 10 years, no

The Consolidated Oil Company must install antipollution equipment in a new refinery to meet federal clean air standards. Useful of life of 10 years, no market value, MARR=15%, analysis period 10 years. Which design should be selected. Use PW method.

Capital investment

Alternative Design

D1

D2

D3

D4

-$600.000

-$760.000

-$1.240.000

-$1.600.000

Annual expenses:

Power

-68.000

-68.000

-120.000

-126.000

Labor

-40.000

-45.000

-65.000

-50.000

Maintenance

-660.000

-600.000

-420.000

-370.000

Taxes and insurance

-12.000

-15.000

-25.000

-28.000

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