Homework Answers
Let us calculate Annual worth of alternatives for comparison:
Packed column:
Net annual benefit = 78,000 - 4,000 = 74,000
AW = -787,100(A/P, 8%, 45) + 74,000 + 99,000(A/F, 8%, 45)
= -787,100(0.0826) + 74,000 + 99,000(0.00259)
= -65,014.46 + 74,000 + 256.41
= $9241.95
Tray column:
Net annual benefit = 70,000 - 2,000 = 68,000
AW = -684,220(A/P, 8%, 34) + 68,000 + 40,000(A/F, 8%, 34)
= -684,220(0.0863) + 68,000 + 40,000(0.00630)
= -59,048.19 + 68,000 + 252
= $9203.81
Since AW of packed column is more than Tray-column, therefore, I will recommend packed column.
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