Engineering Economy course

Question: A retrofitted high-efficiency 4-stage compression unit with compression ratio value of 2.5 is being considered for an offshore natural gas liquefaction plant. The high-efficiency compression unit. can be purchased and installed for 1260,000OMR, and it will save an estimated 400,000kilowatthours (kWh) of electric power each year over an eight-year period. The price of commercial unit of electricity. is 0.02OMR/kWh, and the L. NG Company uses a MARR of 12.5%6 per year in its economic evaluations of overhauled compression unit. The market value of the multistage compression unit will be 900,000 Co OMR at the end of eight years, and additional annual operating and maintenance expenses are 300,000 amess OMR and 250,000 OMR. respectively. Use the PW method to determine whether this multistage compression unit should be installed at LNG plant? Supporting Information: - PW = PW of cash inflows - PW of cash outflows m(Wi)=Fi(1+3+Fi(1+n1+Fi(1+02++F1(1+n)3++F1(1+n)n=i=0NFi(t+i)t. i= eflective interest nate per period (usually one year). N = number of compounding periods: (F/P.H/N)=(1+i)2;(A/F,R/N)=(1+i)211(P/F,hN)=(1+)N1;(A/P,P/,N)=(1+N1i(1+N(F/A,h=N)=t(1+i)N1;(P/G,h,N)=i1[i(1+i)N(1+nN1(1+iNN](P/A,A,N)=a!+N(1+N1(A/G,CinN)=i1(1+)N1N