ClassHW_4

ClassHW_4 - Hw-4 Solutions1(6.3 Cost of heat loss without...

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Unformatted text preview: Hw-4 Solutions1. (6.3) Cost of heat loss without insulation is $2,000 per year. For 1-inch thick insulation (Alternative 1)Cost of heat loss = 12% x 2,000 = 240 Cost of insulation = 0.6 x 1,000 = 600 For 2-inch thick insulation (Alternative 2)Cost of heat loss = 8% x 2,000 = 160 Cost of insulation = 1.1 x 1,000 = 1,100 This is a cost alternative, so choose the insulation which minimizes total cost. By the PW method, PW1= – 600 – 240(P/A,6%,10) = – $2,366.42 PW2= – 1,100 – 160(P/A,6%,10) = – $2,277.62 Select 2-inch thick insulation. 2. (6.7) PWA(20%) = – 28,000 + (23,000 - 15,000)(P/A,20%,10) + 6,000(P/F,20%,10) = $6,509 PWB(20%) = – 55,000 + (28,000 - 13,000)(P/A,20%,10) + 8,000(P/F,20%,10) = $9,180PWC(20%) = – 40,000 + (32,000 - 22,000)(P/A,20%,10) + 10,000(P/F,20%,10) = $3,540 This is an investment alternative, so select the project that maximizes profit. Select Alternative Bto maximize present worth....
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This note was uploaded on 11/13/2011 for the course IE 343 taught by Professor Vincent,g during the Fall '08 term at Purdue.

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ClassHW_4 - Hw-4 Solutions1(6.3 Cost of heat loss without...

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