html Page 175 6 d select the Do Nothing alternative 644 The

html Page 175 /6 (d) select the Do Nothing alternative 644 The initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84.000 The annual operating cost for power site maintenance, etc is S13.000 If the salvage value of the pumps, blowers, and control systems is expected to be $9000 at the end of 10 years, the Aw of the packed-bed reactor, at an interest rate of S% per year, is closest to: (a) S-26.140 (b) S-25.518 (c) S-24.900 (d) S-13.140 645 The AW amounts of three revenue alternatives are S-23.000 for alternative A. S-21.600 for B, and S-27.300 for C On the basis of these AW values, the correct decision 1s to idi select the Do Nothing alternative al woth of on alternative with a 5-vear life, you can calculate its perpetual annual worth by

Solution

1) Solution: -$24,900

Explanation:

AW = [-84,000 * (A/P,8%,10)] - 13,000 + [9,000 * (A/F,8%,10) ]

= (-84,000 * 0.149029) - 13,000 + (9,000 * 0.069029)

= -$24,897

2) Solution: Select alternative B

Explanation: AW with the lowest value be selected