A chemical processing corporation is considering three methods to dispose of a non-hazardous chemical sludge: land application, fluidized-bed incineration, and private disposal contract. The estimates for each method are shown. Determine which has the least cost on the basis of a present worth comparison at 10% per year for the following scenarios:

(a) The estimates as shown

(b) The contract award cost increases by 20% every 2-yearrenewal

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Land Application Incineration Contract -130,000 -95,000 25,000 First cost, S Annual operating 900,000 -60,000 -120,000 cost, $ per year Salvage value, S Life, years 300,000