Determine the equivalent uniform annual cost

Assignment Help Econometrics

Reference no: EM13237849

Jenny is an engineer for a municipal power plant. The plant uses natural gas, which is currently provided from an existing pipeline at an annual cost of $10000 per year. Jenny is considering a project to construct a new pipeline. The initial cost of the new pipeline would be $35000, but it would reduce the annual cost to $5000 per year. Assume an analysis period of 20 years and no salvage value for either the new or existing pipeline. The interest rate is 6%.

a) Determine the equivalent uniform annual cost (EUAC) for the new pipeline.
b) Should the new pipeline be built?

Reference no: EM13237849

Questions Cloud

Determine what are average and marginal tax rates : How much tax of each type do you pay if you earn $20,000 a year Taking all taxes into account, what are your average and marginal tax rates What happens to your tax bill and to your average and marginal tax rates if your income rises to $40,000

Societies evolved in different ways in quest-social order : Societies evolved in different ways in their quest for social order. Compare the ways the Egyptian, Mesopotamian, and Indo-Aryan civilizations dealt with the problem of social order. In particular, consider the role of caste/class and the role of wom..

Find electric feild just outside paint layer : A charged paint is spread in a very thin uniform layer over the surface of a plastic sphere of diameter 16.0 cm, find electric feild just outside paint layer

What is the break-even level of earnings before interest : lester's meat market is currenly an all equity firm that has 24,000 shares of work outstanding at a market price of $25 a share. the firm has decided to leverage its operating by issuing $200,000 of debt at an interst rate of 8 percent.

Determine the equivalent uniform annual cost : Jenny is an engineer for a municipal power plant. The plant uses natural gas, which is currently provided from an existing pipeline at an annual cost of $10000 per year. Jenny is considering a project to construct a new pipeline.

Determine the equivalent annual cost of owning a car : If the owner earns 5% interest on her investments, determine the equivalent annual cost of owning a car with the following costs (EOY=end of year). Initial down payment=$2200 Annual payments=$5500, EOY1-EOY4

What are the four main sections of a cash budget : What are the four main sections of a cash budget what information is conveyed to managers?

Compute uniform annual expenditure to fluctuating amounts : An engineer has a fluctuating future budget for the maintenance of a particular machine. During each of the first 5 years, $1000 per year will be budgeted. During the second 5 years, the annual budget will be $1500 per year.

What is the speed of the plane with respect to the ground : You are traveling on an airplane, The velocity of the plane with respect to the air is 190 m/s due east, What is the speed of the plane with respect to the ground

User Account

All Pages