Question

Spreadsheet solution?

A chemical processing corporation is considering three methods to dispose of a non-hazardous chemi- cal sludge: land application, fluidized-bed incinera- tion, and private disposal contract. The estimates for each method are shown. Determine which has the least cost on the basis of a present worth compari- for the following scenarios: 5.24 Son at 10% (a) The estimates as shown (b The contract award cost increases by 20% every 2-year renewal per year Land Application Incineration Contract First cost, S 130,000 900.000 0 Annual operating cost, S per year -95,000 -60,000 -120,000 Salvage value, S Life, years 25.000 300,000 0 3 6

Answer 1

5:24 | Given Data: Sol: A Chemical processing Corporation is considering three methods to dispose of non-hazardous Chemical sludge: - Land application → Fluidized bed incineration private disposal Contract on the basis of a present worth comparision at 10% per near. Land Apple Incineration Contract first costs @ we have to Estimate 900,000 0 Annual operating the given table -95,000 - - 60,000 -120,000 Cost, $ per year Form and get the required results by Salvage value, & 25,000 300,0000 the Calculation to we | Life, near have to concluded that. pw.of LA = (-130,000 -9.500 (P/A, 10%. 6) -105,000 CP/f yo. 3) + 25000 (MF, 10%6) = -130,000 -95,000(435) -105,000(0.7513)+25000 (0.56) pw of LA = - $609,530 ) pw OF IN - - 900,000 - 60000 (P/A, loy. 6) + 300,000 (P/F, 10,6) PW of IN = $991,970) pw of c .-120,000 (4:35) = $582,640 (pwofc Hence, Least Cost product process is picked.

increases In this by 20v. the contract award cost every 2-year Renewal pw of c = r120,000 CP/A, 10% 12) 120,000 C1-20) CP/A, toy. 2) (P/F, 10%12) -120,000 (1.23CP/A, 10. 2)CP/F, 10%.4) In this regand splitting the calculation for 2 nears. = -120,000 (174) - 144,000 (1.745) (0.82). 172,500 (1.745) (0.640) pw of c = - $619, 614 .. we are getting by Renewal Contract award increasing 20% the in Every an year the cost of