Question: has been A pork-processing facility is considering installing either a storage facility or a holding pond. A biosystems engineer has been hired to evaluate the

 has been A pork-processing facility is considering installing either a storage

has been A pork-processing facility is considering installing either a storage facility or a holding pond. A biosystems engineer has been hired to evaluate the economic trade-offs for the two alternatives. The engineer estimates the cost of the storage facility to be $213,000, with annual costs for maintenance to be $3,200 per year. She estimates the cost of the pond to be $90,000, plus $45,000 for pumps and piping; annual operating and maintenance costs for the holding pond are estimated to be $8,500. The engineer estimates the life of the storage facility and the pond to be around 20 years but is concerned about the accuracy of this estimate. She decides to do a sensitivity analysis. about the accuracy or ths astenance costs for te holdinnual costs for maintenancet Click here to access the TVM Factor Table Calculator Develop the equation she should use to determine how sensitive the economic decision is to changes in life. Use a MARR of 15%. Equation that can be used to determine the sensitivity is Determine which alternative is preferred for lives ranging from 15 to 25 years in 1 year increments: Life Difference Preferred Alternative 15 16 18 19 20 21 23 24 25

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!