# A process heat recovery study identifies five potential modifications, none of which are mutually exclusive, with the

## Question:

A process heat recovery study identifies five potential modifications, none of which are mutually exclusive, with the costs and energy savings as follows:

If fuel costs $6/MMBtu and the plant operates for 350 days/year, which projects have a simple payback period less than 1 year?

What is the maximum 10-year NPV that can be achieved with a 15% interest rate and a 35% tax rate? Assume all the projects can be built immediately and use MACRS depreciation with a 7-year recovery term. What combination of projects is selected to meet the maximum NPV?

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