A water utility is trying to decide between an investment of doing infiltration and inflow correction for
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Question:
A water utility is trying to decide between an investment of doing infiltration and inflow correction for the cost of $5,000,000 or do nothing a pay the additional amount for treating the infiltration at their plant. The additional annual operating costs for the do-nothing alternative is $1,500,000 while the additional annual operating costs associated with the inflow correction is estimated at $150,000. The cost of money criteria for the investment (capital bond for municipal utility) is 3.5% and the time frame for the analysis is 20 years. Which approach is best? (the value for P/A, 3.5%, 20 years is 14.2124)
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