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The plant engineer, lt. Shahrim working in Ammonia Plant Kerteh, Terengenu is evaluating several alternatives to supply electricity to the facility. Normally, he will pay
The plant engineer, lt. Shahrim working in Ammonia Plant Kerteh, Terengenu is evaluating several alternatives to supply electricity to the facility. Normally, he will pay RM7 million for electricity purchased from Tenaga Nasional Berhad (INB) for the fist ycar and expect an increase of RM750,000 annually. Alternatively, he plans to build a 7,000 kW Power Plant. His for the power plant are estimated to be RM230,000 per year. So, he is considering two alternative fuels: operating cost, other than fuel Alternative A-COAL Installation Cost Fuel Consumption Fuel Cost Incremental Cost Rate No Salvage value RM2500kW 50,000 tonnes per year RM50 per ton RM4 per ton per year after year one Alternative BOIL Installation Cost Fuel Consumption Fuel Cost Incremental Cost Rate No Salvage value RM1800/kW 100,000 barrels per RM88 per barrel RM3 per barmel peryear afer year one Alternative C-Do Nothing, ie. solely depend on TNB Supply. If interest rate is 10%, and the analysis period is 10years, perform cpisat uiform amal worth (EUAW) analysis on each altermative as the following Using Coal, A? a) 3 Marks) b) Using Oil, B? r 3 Marks) e Do Nothing (Use TNB supply). C? 3 Marks) d Which alternative should be the best choice for Ir. Shahrim? 3 Marks)
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