Please answer Q.2 only, thanks.

The water supply demand for a new development is estimated to be 200 l/s. There are two alternatives to provide water supply. Alternative 1: Water can be supplied from an existing freshwater reservoir that is situated on a hill (i.e. no pumping is required). However the reservoir is 10 Km away from the new development. Therefore, a new pipe (10 km long and 350mm diameter) is required. The cost of pipe per kilometer is: CT 8 million HKS/km Past data shows that the number of pipe breaks per kilometer at time t is: N(t)N(0)eAt Breaks in year t Where N(0) 0.15 breaks/km/year, A The cost of fixing a break is: 0.1 per year Cb35,000HKS /break Alternative 2: The new development is on the sea front. Therefore, desalination can be used as a source of water supply. The cost of desalination is: C 18 HKS/m3 This cost includes the cost of the plant and the cost of the operation. If the life of the project is 100 years and the interest rate is 10%; 1. Find the optimal pipe replacement time t associeted with the planned 10 km pipe in alternative 2. What is the NPV (PW), FW, and AW of each alternative? Which alternative should be selected? What non-economical consideration may you wish to look at? 3. 4. The water supply demand for a new development is estimated to be 200 l/s. There are two alternatives to provide water supply. Alternative 1: Water can be supplied from an existing freshwater reservoir that is situated on a hill (i.e. no pumping is required). However the reservoir is 10 Km away from the new development. Therefore, a new pipe (10 km long and 350mm diameter) is required. The cost of pipe per kilometer is: CT 8 million HKS/km Past data shows that the number of pipe breaks per kilometer at time t is: N(t)N(0)eAt Breaks in year t Where N(0) 0.15 breaks/km/year, A The cost of fixing a break is: 0.1 per year Cb35,000HKS /break Alternative 2: The new development is on the sea front. Therefore, desalination can be used as a source of water supply. The cost of desalination is: C 18 HKS/m3 This cost includes the cost of the plant and the cost of the operation. If the life of the project is 100 years and the interest rate is 10%; 1. Find the optimal pipe replacement time t associeted with the planned 10 km pipe in alternative 2. What is the NPV (PW), FW, and AW of each alternative? Which alternative should be selected? What non-economical consideration may you wish to look at? 3. 4