Which liner is cost effective on the basis of interest rate

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An engineer is considering two different liners for an evaporation pond that will receive salty concentrate from a brackish water desalting plant. A plastic liner will cost $0.90 per square foot initially and will require replacement in 15 years when precipitated solids will have to be removed from the pond using heavy equipment. This removal will cost $500,000. A rubberized elastomeric liner is tougher and, therefore, is expected to last 30 years, but it will cost $2.20 per square foot. If the size of the pond is 110 acres (1 acre 43,560 square feet), which liner is more cost effective on the basis of a present worth comparison at an interest rate of 8% per year?

Reference no: EM13200285

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