Welcome to MunInsight, Canadas largest consulting firm dedicated to helping municipalities make strategic decisions using best practices in engineering economics and project management.

As an entry-level project engineer, you will be working remotely for the first few months of your job. But you are still an essential part of the MunInsight team. Weve been asked by the City of Saskatoon to choose between two new water reclamation options. Theyve provided us with a fairly complete set of documents, so you dont need to look around for information beyond whats included here. The turn-around for this assignment is fairly tight 72 hours. But that should be more than enough time for you to complete your calculations and develop some guidance for the City of Saskatoon. Remember, this is your first impression for us, and our first impression for the client, so take the time to edit and fine-tune your language. Ive provided you with fairly strict word limits. They dont have a lot of time to read the details, so make sure you explain the necessary information succinctly. That will mean a bit of time editing your text to make sure it is informative and clear.

For your first assignment, youve been tasked with comparing the following two processes. The table summarizes the costs associated with each.

Question: The City of Saskatoon has applied a real MARR of 4% on similar past projects. Assuming the same rate can be applied here, calculate the minimum feasible salvage value for each of the options. Consider the inflation rate will remain the same as over the last five years, when CPI rose from 124.6 to 136.5. In the space below, show your calculations using factor notation (for example (P/A, i, n)).

Process A Process B First Cost $500,000 $800,000 Salvage $66,000 $80,000 Annual Savings $40,000 $70,000 Maintenance $3000 every 3 years $1000 occurs every other year, starting the first year and increases by $500 each time Service Life 20 16 Process A Process B First Cost $500,000 $800,000 Salvage $66,000 $80,000 Annual Savings $40,000 $70,000 Maintenance $3000 every 3 years $1000 occurs every other year, starting the first year and increases by $500 each time Service Life 20 16