question archive Drexel is expiring chemical deposits scale on the inside of pipes
Subject:EconomicsPrice:2.86 Bought9
Drexel is expiring chemical deposits scale on the inside of pipes. The scale cannot be removed, but increasing the pumping pressure can maintain the flow through the narrow diameter. The first cost associated with the new process is $30,000. What is the economic life of the pipe if the interest rate is 12% and salvage values and O&M costs are as follows? (Please show all work to receive full credit)
Year |
1 |
2 |
3 |
4 |
5 |
Salvage |
$6,000 |
$5,000 |
$2,500 |
$1,000 |
$0 |
O$M |
$8,000 |
$13,000 |
$18,000 |
$23,000 |
$28,000 |
Purchased 9 times