Your company is considering modifying an existing distillation column. A new reboiler and condenser will be required, along with several other peripherals. The equipment lists are as follows:

The internal hurdle rate for comparison of investments is set at 12% p.a. Which option do you recommend?

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Option 1 Equipment Installed Cost ($) Operating Cost ($/y) Equipment Life (y) Condenser 50,000 Reboiler 75,000 Reflux Pump7500 Reflux Drum 12,500 Piping 8000 Valves 6500 Option 2 Piping Valves 7000 5000 8000 8000 6500 Equipment Installed Cost (S) Operating Cost ($/y) Equipment Life (y) Condenser 75,000 Reboiler 75,000 Reflux Pump10,500 Reflux Drum14.500 10 15 10 4000 5000 5000 10 15 10 15 15 15 15 15 10