An empirical expression that is sometimes used to estimate the base cost of a
shell and tube heat exchanger is (Corripio, Chrien, and Evans 1982),

In this equation, cHX is the heat exchanger cost in U.S. dollars, and A is the heat
transfer area in square meters. Consider a shell and tube heat exchanger with a
heat transfer area of 400 m2. The heat exchanger has a life of 25 years, with a salvage
value equal to 5% of its initial cost. The annual operation and maintenance
costs are anticipated to be 15% of the initial cost. The after-tax rate of return is
14.1%. The company’s tax rate is 52% and SLD is used for depreciation. For this
heat exchanger, the tax life is 20 years and the salvage value is $6,500. Determine
the uniform annual savings resulting from this heat exchanger.

Transcribed Image Text:

CHX = exp[8.202+0.1506 In A +0.06811(In A)]