Determine the optimum number of effects for minimum

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Reference no: EM131061450

A multiple-effect evaporator is to be used for evaporating 400,000 lb of water per day from a salt solution. The total initial cost for the first effect is $18,000, and each additional effect costs $15,000. The life period is estimated to be 10 years, and the salvage or scrap value at the end of the life period may be assumed to be zero. The straight-line depreciation method is used. Fixed charges minus depreciation are 15 percent yearly based on the first cost of the equipment. Steam costs $1.50 per 1000 lb. Annual maintenance charges are 5 percent of the initial equipment cost. All other costs are independent of the number of effects. The unit will operate 300 days per year. If the pounds of water evaporated per pound of steam equals 0.85 x number of effects, determine the optimum number of effects for minimum annual cost.

Reference no: EM131061450

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