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    PROBLEMS 5.24, 5.31, & 5.34: Prepared by Group 5: ALMEDA, BALUYOT, PEREZ, and TAN

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    KARIM
    This document contains summaries of problems 5.24, 5.31, and 5.34 from a chemical processing group. Problem 5.24 compares costs of three waste disposal methods, with land application initially cheapest but a contract becoming cheaper when costs increase. Problem 5.31 calculates donations needed to fund $100,000 annual withdrawals from an endowment earning 8%. Problem 5.34 compares costs of desalinated seawater, groundwater, and a contractor's water offer, with the contractor initially cheapest but groundwater better if costs increase annually.

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    PROBLEMS 5.24, 5.31, & 5.34: Prepared by Group 5: ALMEDA, BALUYOT, PEREZ, and TAN

    Uploaded by

    KARIM
    71 views14 pages
    This document contains summaries of problems 5.24, 5.31, and 5.34 from a chemical processing group. Problem 5.24 compares costs of three waste disposal methods, with land application initially cheapest but a contract becoming cheaper when costs increase. Problem 5.31 calculates donations needed to fund $100,000 annual withdrawals from an endowment earning 8%. Problem 5.34 compares costs of desalinated seawater, groundwater, and a contractor's water offer, with the contractor initially cheapest but groundwater better if costs increase annually.

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    This document contains summaries of problems 5.24, 5.31, and 5.34 from a chemical processing group. Problem 5.24 compares costs of three waste disposal methods, with land application initially cheapest but a contract becoming cheaper when costs increase. Problem 5.31 calculates donations needed to fund $100,000 annual withdrawals from an endowment earning 8%. Problem 5.34 compares costs of desalinated seawater, groundwater, and a contractor's water offer, with the contractor initially cheapest but groundwater better if costs increase annually.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    71 views14 pages

    PROBLEMS 5.24, 5.31, & 5.34: Prepared by Group 5: ALMEDA, BALUYOT, PEREZ, and TAN

    Uploaded by

    KARIM
    This document contains summaries of problems 5.24, 5.31, and 5.34 from a chemical processing group. Problem 5.24 compares costs of three waste disposal methods, with land application initially cheapest but a contract becoming cheaper when costs increase. Problem 5.31 calculates donations needed to fund $100,000 annual withdrawals from an endowment earning 8%. Problem 5.34 compares costs of desalinated seawater, groundwater, and a contractor's water offer, with the contractor initially cheapest but groundwater better if costs increase annually.

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    Download as pptx, pdf, or txt
    of 14

    PROBLEMS 5.24, 5.31, & 5.

    34
    Prepared by Group 5: ALMEDA, BALUYOT, PEREZ, and TAN
    5.24

    A chemical processing corporation is considering three methods


    to dispose a non-hazardous chemical sludge: land application,
    fluidized-bed incineration, and private disposal contract. The
    estimation for each method are shown. Determine which has the
    least cost on the basis of present worth comparison at 10% per year
    for the following scenarios:
    (a) The estimates are shown
    (b) The contract award cost increases by 20% every 2-years renewal.
    5.24

      Land Application Incineration Contract

    First Cost, $ -130000 -900000 0

    Annual Operating Cost, $ per year -95000 -60000 -120000

    Salvage Value, $ 25000 300000 0

    Life, years 3 6 2
    5.24 (a)

    PW
       LAND = – $130000 – $95000 (P/A, 10%, 6) – $105000 (P/F, 10%, 3) + $25000 (P/F, 10%, 6)
    PWLAND =
    PWLAND = – $608528

    PWINCIN = – $900000 – $60000 (P/A, 10%, 6) + $300000 (P/F, 10%, 6)


    PWINCIN =
    PWINCIN = – $991968
    5.24 (a)

    PW
      CONTRACT = – $120000(P/A, 10%, 6)
    PWCONTRACT =
    PWCONTRACT = – $522636

    THEREFORE, SELECT PRIVATE DISPOSAL CONTRACT


    5.24 (b)

    PW
      CONTRACT = – $120000 (P/A, 10%, 2) – $120000 (1.2) (P/A, 10%, 2) (P/F, 10%, 2)
    PWCONTRACT =
    PWCONTRACT = – $619615

    THEREFORE, SELECT LAND APPLICATION CONTRACT; THE SELECTION CHANGED


    5.31

    Wealthy businessman wants to start a permanent fund for


    supporting research directed toward sustainability. The donor
    plans to give equal amounts of money for of the next 5 years,
    plus one now (i.e. six donations) so that $100000 per year can be
    withdrawn each year forever, beginning in year 6. If the fund
    earns interest at a rate of 8% per year, how much money must be
    donated each time?
    5.31

    CC  = – (P/F, 8%, 5)


    CC = –
    CC = – $850750
    5.34

    It is anticipated that the need for UPW (ultrapure water) at


    the new Angular Enterprises site will continue for a long time, as
    long as 50 years. This is the rationale for using capitalized cost as
    a basis for the economic decision between desalinated seawater
    (S) and purified groundwater (G). These costs were determined
    to be CCS = – $53.38 million and CCG = – $48.91 million.
    Groundwater is the clear economic choice.
    5.34

    Yesterday, the general manager had launch with the president


    of Brissa Water, who offered to supply the needed UPW at a cost
    of $5 million per year for the indefinite future. It would mean a
    dependence upon a contractor to supply the water, but the
    equipment, treatment, and other costly activities to obtain UPW
    on-site would be eliminated. The manager ask you to make a
    recommendation about this seemingly attractive alternative
    under the following conditions at the same time MARR of 12%
    per year as used for the other analysis:
    5.34

    (a) The annual cost of $5 million remains constant all throughout


    the time it is needed.
    (b) The annual cost starts at $5 million for the first year only, and
    then it increases 2% per year. (This increase is above the cost
    providing UPW by either of the two methods.)
    5.34 (a)

    CC C =
    CCC = –
    CCC = – $41.67M

    THEREFORE, BETWEEN THE THREE OPTIONS, SELECT THE CONTRACTOR


    5.34 (b)

    Pg =
    Pg = – $49.53M

    A = Pg (A/P, 12%, 50)


    A = Pg
    A = – $5.96M
    5.34 (b)

    CC C =
    CCC = –
    CCC = – $49.7M

    THEREFORE, BETWEEN THE THREE OPTIONS, SELECT THE GROUNDWATER

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