A civil engineer is considering two types of pipes for oil refinery. A small pipeline will...

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A civil engineer is considering two types of pipes for oil refinery. A small pipeline will cost less to purchase but will have high headloss and therefore a higher pumping cost. The small pipeline will cost $1.7M installed and will have an operating cost of %12,000 per month. A larger diameter pipeline will cost $2.1M installed, but its operating cost will be only $8,00o per month. Which type is more economical at an interest rate of 1% per month using AW analysis. Assume a SV of 10% of the first cost for each pipeline at the end of 10 years. A civil engineer is considering two types of pipes for oil refinery. A small pipeline will cost less to purchase but will have high headloss and therefore a higher pumping cost. The small pipeline will cost $1.7M installed and will have an operating cost of %12,000 per month. A larger diameter pipeline will cost $2.1M installed, but its operating cost will be only $8,00o per month. Which type is more economical at an interest rate of 1% per month using AW analysis. Assume a SV of 10% of the first cost for each pipeline at the end of 10 years.

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1 SMALL PIPELINE SALVAGE VALUE 10 SMALL PIPELINE 10 170000... View the full answer