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    Joselito Daroy
    The document describes a problem set involving calculating the present worth of a fluidized-bed combustion vessel project. It provides details on the vessel's initial investment cost of $100,000, annual costs of $8,000, and a $20,000 relining cost in year 5. Using the given 15% interest rate, formulas are provided to calculate the present worth as $146,116.27, accounting for initial costs, annual costs over 10 years, and discounted relining costs in year 5.

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    Number 1

    Uploaded by

    Joselito Daroy
    7 views1 page
    The document describes a problem set involving calculating the present worth of a fluidized-bed combustion vessel project. It provides details on the vessel's initial investment cost of $100,000, annual costs of $8,000, and a $20,000 relining cost in year 5. Using the given 15% interest rate, formulas are provided to calculate the present worth as $146,116.27, accounting for initial costs, annual costs over 10 years, and discounted relining costs in year 5.

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    The document describes a problem set involving calculating the present worth of a fluidized-bed combustion vessel project. It provides details on the vessel's initial investment cost of $100,000, annual costs of $8,000, and a $20,000 relining cost in year 5. Using the given 15% interest rate, formulas are provided to calculate the present worth as $146,116.27, accounting for initial costs, annual costs over 10 years, and discounted relining costs in year 5.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    7 views1 page

    Number 1

    Uploaded by

    Joselito Daroy
    The document describes a problem set involving calculating the present worth of a fluidized-bed combustion vessel project. It provides details on the vessel's initial investment cost of $100,000, annual costs of $8,000, and a $20,000 relining cost in year 5. Using the given 15% interest rate, formulas are provided to calculate the present worth as $146,116.27, accounting for initial costs, annual costs over 10 years, and discounted relining costs in year 5.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    PROBLEM SET NO.

    2
    ES 321

    1. A certain fluidized-bed combustion vessel has an investment cost


    of $100,00, a life of 10 years and negligible market (resale)
    value. Annual cost of materials, maintenance, and electric power
    for the vessel are expected to total to $8,000.00. A major relining
    of combustion vessel will occur during the fifth year at a cost of
    $20,000; during this year, the vessel will not be in service. If the
    interest rate is 15% per year, what is the lump sum equivalent
    cost of this project at the present time?

    A annual cost = $8,000


    i interest rate per year = 15%
    n 10 years
    IC initial investment cost = $100,000
    A5 $20,000

    Present worth IC
    A
    i

    1 ( 1 i )10 ( A5 A )( 1 i )5

    Present worth
    $8 ,000
    $100 ,000
    0.15

    1 ( 1 0.15 )10 ($20 ,000 $8 ,000 )( 1 0.15 )5

    Present worth $146 ,116 .27

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