1 answer

Case The city of Flinth, Arizona needs a new water delivery system from Lake Not There...

Question:

Case The city of Flinth, Arizona needs a new water delivery system from Lake Not There Yet. The two options proposed by the cQuestion Three Your recommendation to the city council is: [Select]

Case The city of Flinth, Arizona needs a new water delivery system from Lake Not There Yet. The two options proposed by the city engineers are the following. Given the pace of remediation, the city assumes that this delivery system is not going to be too temporary a fix. • Option one is a water delivery system using the laws of nature and ingenuity of its designers, similar to the East Maui irrigation system in Hawaii. The initial investment is estimated at $3.5 million. The canals need annual maintenance, estimated at $15,000. The water transport system lasts 30 years. Option two is a similar pipeline system used to transport water from neighboring states to California. The initial investment is estimated at $2.5 million. The power cost is estimated to be $30,000 for the first year of operation with a 6.5% increase in the following years. At year 8, an overhaul of $200,000 is expected. The pipeline is expected to last 20 years. The annual operation and maintenance are estimated to cost the city an extra $25,000. You were hired by the city council to audit the proposed plans and make a recommendation. After your inquiry, you learned that the city's MARR is 5.5%.
Question Three Your recommendation to the city council is: [Select]

Answers

Equivalent annual cost of option one = 3500000 * (A/P, 5.5%,30) + 15000

= 3500000 * 0.068805 + 15000

= 255818.86 ~ 255819 (Nearest Dollar)

For option two

Present value of geometric series = A * [1 - (1+g)^n / (1+i)^n] / (i-g)

We need to find present value of power cost for 20 yrs

Present value of power cost =  30000 * [1 - (1+0.065)^20 / (1+0.055)^20] / (0.055-0.065)

=  30000 * [1 - (1.065)^20 / (1.055)^20] / (-0.01)

= 30000 * 20.76552198

= 622965.66

Equivalent annual cost of option two = (2500000 + 200000 * (P/F, 5.5%,8) + 622965.66) *(A/P, 5.5%,20) + 25000

= (2500000 + 200000 * 0.651599 + 622965.66) * 0.083679 + 25000

= 297232.75 ~ 297233 (Nearest Dollar)

As Equivalent annual cost of option one is lower it should be selected

.

Similar Solved Questions

1 answer
4. A pregnant woman is worried about the chances of her child having hemophilia as both...
4. A pregnant woman is worried about the chances of her child having hemophilia as both she and her husband have paternal grandfathers with hemophilia. Neither their parents nor their maternal grandparents have hemophilia. Hint: use superscripts to label both normal and hemophilia genotypes. What is...
1 answer
What is the difference between the equivalence point of a titration and the end point of...
What is the difference between the equivalence point of a titration and the end point of a titration? They are not different. The equivalence point is when the reaction has reached completion while the end point is an estimate of the completion. The equivalence point is when the reaction has reach...
1 answer
Question 8 of 24 Step 1 of 2 02:13:04 The following table was generated from the...
Question 8 of 24 Step 1 of 2 02:13:04 The following table was generated from the sample data of 10 junior high students regarding the average number of hours they are unsupervised per night, the average number of hours they play video games per night, and their final grades in their math class. The ...
1 answer
Consider this reaction: --> At the same concentrations, the rate at 942 K is 7.85 x...
Consider this reaction: --> At the same concentrations, the rate at 942 K is 7.85 x 102 times faster than the rate at 300 K. What is the activation energy for this reaction? 5.23 x 102 kJ/mol C 8.90 kJ/mol C 24.4 kJ/mol C 45.3 kJ/mol C 418 kJ/mol C 366 kJ/mol 6.88 x 10-1 kJ/mol 7.09 x 103 kj/mol...
1 answer
(17 points) (a) Find the general solution of the differential equation y" (t) + 36y(t) =...
(17 points) (a) Find the general solution of the differential equation y" (t) + 36y(t) = 0. general solution = (Use the letters A and B for any constants you have in your solution.) (b) For each of the following initial conditions, find a particular solution. (1) y(0) = 0,7(0) = 1: y= (ii) y(0) ...
1 answer
DI dt It is found that the rate of recovery of the infectives attending the clinics...
dI dt It is found that the rate of recovery of the infectives attending the clinics can be improved by increasing the number of visits per patient per month. This is modelled by increasing E. Increasing E turns out to be a much cheaper healthcare option than increasing H by allocating extra hospital...
1 answer
Amalgamated Popcorn, Inc. sells bags of flavored gourmet popcorn in a popular mall. As shop owner...
Amalgamated Popcorn, Inc. sells bags of flavored gourmet popcorn in a popular mall. As shop owner and operator, Rhea estimates the demand for flavored popcorn to be: Q = 1,200 – 800P + 2A, where A denotes advertising weekly spending (in dollars), Q is the bags of popcorn demanded and P is the ...
1 answer
According to the New Hampshire Department of Education, the average teacher salary in public school districts...
According to the New Hampshire Department of Education, the average teacher salary in public school districts in New Hampshire was $45,166 in 2006, $46,670 in 2007, and $45,166 in 2008. Use the following information on CPI and PPI. Year CPI (1982 - 84 = 100) 201.59 164.80 207.34 PPI (1982 - 100) 200...
1 answer
Answer Master of Business Administration MBFM230 Financial Management Sem. April - August 2019 Prof. Dr. Azahari...
Answer Master of Business Administration MBFM230 Financial Management Sem. April - August 2019 Prof. Dr. Azahari Jamaludin Assignment 1 (40% marks) ASSIGNMENT QUESTION: (a) Listed below are examples of costs that may be incurred by organizations for managing their businesses, 1) Wages of workers ass...
1 answer
Consider your current company, or a company that you have formerly worked for, and describe and...
Consider your current company, or a company that you have formerly worked for, and describe and critique the budgeting processes that are used for that organization. If you do not have relevant work experience, use the GCU Library to locate an article on budgeting or forecasting and compare the proc...
1 answer
1 Problem 7 (20 marks) A sales manager for an advertising agency believes there is a...
1 Problem 7 (20 marks) A sales manager for an advertising agency believes there is a relationship between the number of contacts and the amount of the sales. To verify this believe, the following data was collected: Salesperson Number of Contacts Sales (in thousands) 14 24 2 12 14 3 20 28 4 16 30 16...
1 answer
Find the adjusting entry. In January 2022, the management of Crane Company concludes that it has...
Find the adjusting entry. In January 2022, the management of Crane Company concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During the year, the following transactions occurred. Jan. 1 Purchased 74 $1,000, 8% TRC bonds for $74,000. Interest ...
1 answer
A circuit contains only a(n) 0.17 H inductor. An AC voltage of peak value 175 V...
A circuit contains only a(n) 0.17 H inductor. An AC voltage of peak value 175 V and frequency 61.2 Hz is applied to the circuit. When the instantaneous voltage is 175 V, what is the instantaneous AC current? Answer in units of A....
1 answer
Design a divide-by-six circuit, using any standard gates and/or flip-flops you wish. (When a 60Hz square...
Design a divide-by-six circuit, using any standard gates and/or flip-flops you wish. (When a 60Hz square wave signal is provided as input to this circuit, a 10Hz signal should result.) For full credit, this output signal should also have exactly a 50% duty cycle, even if the input duty cycle is not ...
1 answer
Which major biogeochemical cycle does not have an atmospheric component?
Which major biogeochemical cycle does not have an atmospheric component?...
1 answer
One key difference concerning the communications from the Fed's FOMC and the European Systems Governing Council...
One key difference concerning the communications from the Fed's FOMC and the European Systems Governing Council is: Select one: a. The statement from the FOMC is typically longer and more detailed than that from the Governing Council O b. The leaders of the FOMC answer questions from the financi...