Question: Problem 6 As the design engineer of record on the new Lake Woebegone water treatment plant you are considering two different pumps Initial Cost Annual

Problem 6 As the design engineer of record on the new

Problem 6 As the design engineer of record on the new Lake Woebegone water treatment plant you are considering two different pumps Initial Cost Annual O&M Costs Salvage Value Life Pump Type A $20,000 $5,000 $1,000 years Pump Type B $30,000 $2,000 $4,000 5 vears Using an effective annual interest rate of 10%, which of these two pump option is eco- nomically superior? Ignore any influence of taxes and inflation. Hint: since the two options mparison, rather thana present value. This approach is equivalent to assuming replacement-in-kind at the end of the pumps' lives

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