Two incinerators are being considered by a waste management company. Design A has an initial cost of

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Two incinerators are being considered by a waste management company. Design A has an initial cost of \($2\),500,000, has annual operating and maintenance costs of \($800\),000, and requires overhauls every 5 years at a cost of \($1\),250,000.

Design B is more sophisticated, including computer controls; it has an initial cost of \($5\),750,000, has annual operating and maintenance costs of \($600\),000, and requires overhauls every 10 years at a cost of \($3\),000,000. Using a 5 percent/year interest rate, determine the capitalized cost for each design and recommend which should be chosen.

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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