An engineer must decide between two chemical coagulation systems for a 10 million gallon per day water treatment plant. The cost of system 1 is known, and is provided in the table. Interest rate is 5%, and the analysis period is 20 years. The cost of chemicals for system 2 is uncertain. System 2 uses chemicals at a rate of 160 pounds per day. At what price (dollars per pound) of chemicals for system 2 are the 1 two options equivalent? Solve using annual cash flow analysis, and draw the breakeven chart for this problem.
| System1 | System2 |
Initial cost | $300,000 | $500,000 |
Annual chemical cost | $50,000 | unknown |
Lifetime | 20 years | 20 years |
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