Question

Problem 06.022 Evaluating Alternatives by Annual Worth Analysis An environmental engineer wants to evaluate three different methods for disposing of nonhazardous chemical waste: land application, fluidized-bed incineration, and private disposal contract. Use the estimates below to help her determine which has the least cost at i= 11% per year on the basis of an annual worth evaluation. 1 T First Cost AOC per Year Salvage Value Life Land $-150,000 $-97,000 $29,000 4 years Incineration -720,000 $-62,000 $370,000 6 years Contract 0 $-144,000 0 2 years The environmental engineer selects a (Click to select)

Answer 1

EUAC of Land = 150000 * (A/P,11%,4) + 97000 - 29000 * (A/F,11%,4)

= 150000 *0.322326 + 97000 - 29000 *0.212326

= 139191.49

EUAC of incineration = 720000 * (A/P,11%,6) + 62000 - 370000 * (A/F,11%,6)

= 720000 *0.236377 + 62000 - 370000 *0.126377

= 185431.80

EUAC of contract = 144000

As EUAC of Land is lowest it should be eelected