If a number is smaller than 0.001 please express it in scientific notation (e.g. 10-3) Your homework must be typed up, no handwritten work will be graded. See the syllabus for other formatting details. The Charvon oil company is planning to make a large investment in coal-to-liquids (CTL) gasoline. The end product will be a perfect substitute for gasoline made from petroleum, but the feedstock will be coal instead of oil. Two technologies are available to the Charvon Company. The first is called indirect CTL, where the coal is gasified prior to being liquefied. The second is called direct CTL, where the coal is dissolved in a solvent, and the resulting liquid is processed into gasoline. The Charvon company has hired you as a consultant to help them decide which technology they should choose. Charvon expects to produce 1.2 million gallons of CTL gasoline in each of the next twenty five years, and they can sell the gasoline for $2.25 per gallon. The capital cost of indirect CTL is $10.5 million and operating costs for indirect CTL (labor, fuel, and maintenance) are $600,000 per year. The capital cost of direct CTL is $16 million and operating costs for direct CTL are $280,000 per year.

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