An environmental consultant is considering the installation of a water storage tank for a client. The tank
Question:
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of \($426\),000, and annual maintenance costs are estimated to be \($6\),400 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of \($180\),000 for the pond plus \($90\),000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be \($17\),000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value. Determine the preferred alternative based on a present worth analysis with a MARR of 20 percent/year.
Step by Step Answer:
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt