How to write the appropriate interest-factor equation

Assignment Help Civil Engineering

Reference no: EM13305717

A city wants its municipal engineer to evaluate three alternatives for supplementing the city's water supply. The first alternative is deep-well pumping at an annual cost of $10500. The second alternative is to instal an 18 inch diameter pipeline from a local surface reservoir at a first cost of $25000 and an annual pumping cost of $7000. The third alternative is to install a large, 24 inch diameter pipeline from the surface reservoir at a first cost of $34000 and an annual pumping cost of $5000. The useful life of all alternatives is 20 years. For the second and third alternatives, salvage value is 10% of first cost. With interest at 8%, which alternative should the engineer recommend? Use present worth analysis.
a) Identify & list all costs/revenues
b) Draw a cash flow diagram
c) Write the appropriate interest-factor equation
d) Calculate the net present worth (i.e., the net worth of the cash flow at "year-0"). Show all interest-factor values.
e) State the decision based upon a comparison between each alternative's PW value (i.e., which alternative has the highest revenue or lowest cost?)

Reference no: EM13305717

Questions Cloud

How sensitive ocf to increase of one unit in quantity sold : Consider a 3-year project with the following information: initial fixed asset investment = $770,000.

Can you help me determine if the image is real or virtual : Two thin lenses with a focal length of magnitude 12.0cm, the first is diverging and the second is converging, are located 9.00cm apart. Can you help me determine if the image is real or virtual

How fast will the child be moving at lowest point in swing : a child is swinging on a swing set. if the chains holding the swing are 5m long, how fast will the child be moving at the lowest point in the swing

What is the cash flow margin : Given that Good Health Clinic is a not-for-profit organization with 100% equity, what is the cash flow margin?

How to write the appropriate interest-factor equation : The first alternative is deep-well pumping at an annual cost of $10500. The second alternative is to instal an 18 inch diameter pipeline from a local surface reservoir at a first cost of $25000 and an annual pumping cost of $7000.

What is the corporate cost of capital at 37% tax : Suppose the capital is 0.7 equity and 0.3 debt. Assume the stockholders are receiving 11% in return while the creditors are receiving 9.5%. What is the corporate cost of capital at 37% tax?

Calculate the work done by a person pulling a sled : calculate the work done by a person pulling a 50kg sled, at constant velocity, along the snow at an angle of 50 degrees from vertical for 5m

What is the immediate dilution effect of new stock issue : The hamilton corp currently has 4 million shares of stock outstanding and will report earnings of $6,000,000 in the current year. The company is considering the issuance of 1 million additional shraes that will net $30.00 per share to the corporat..

Calculate molar concentration of metal ion in stock solution : calculate the: 1) molar concentration of metal ion in the stock coagulant solution; 2) coagulant feed rate (into the process water flow stream) in units of L/day and L/min; 3) alkalinity consumed (in the process water flow stream) in units of mg/L..

User Account

All Pages