Q1. The Consolidated Oil Company must install antipollution equipment in a new refinery to meet federal clean-air standards.
Four design alternatives are being considered, which will have capital investment and annual operating expenses as shown below.
Assuming a useful life of 8 years for each design, no market value, a desired MARR of 10% per year, determine which design should be selected on the basis of the PW method.
Confirm your selection by using the FW and AW methods.
Design Capital Investment Annual Expenses
D1 $600,000 $780,000
D2 760,000 728,000
D3 1,240,000 630,000
D4 1,600,000 574,000
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