Question

8-33: The town of Drygulch has been flooding once per year for the last thirty years. Folks have pretty much accepted the damages it causes. You have analyzed the flood periodicity and monetary impact to the town and know that with an upgrade to the storm drain system there would be a yearly savings depending on the flow rate (in kilogallons per minute, kgpm) of a new drainage system. The town expects a 10% MARR on any public works project. All of the drainage systems in the table below will have thirty years of useful life but the materials used can be recycled at the end of their life, remarkably giving the town back the same amount of funds that were originally needed for whatever system was chosen

You remember that Dr. Jones, your engineering economics professor at MSU, used Equation 6-3:

                                                       EUAC = (P-S)(A/F,i,n) + Pi

of the textbook to show that when P = S, then EUAC = Pi è i = A/P, and so any incremental would be

                                                       DEUAC = DPDi è Di = DEUAC/DP è Di = DA/DP.

Flow Rate Options	Funds Needed, $	Yearly Savings, $
Do Nothing	0	0
50 kgpm	197,000	24,700
100 kgpm	297,000	34,700
150 kgpm	410,000	40,100
200 kgpm	497,000	54,700
250 kgpm	630,000	60,400
300 kgpm	697,000	64,700

Complete the table below to decide which system should be selected        <10 pts>

Flow Rate Options	i = A/P, %	DA, $	DP, $	Di = DA/DP, %	Winner?
Do Nothing (≡ DN)
50 kgph (≡ 50)	A50/P50 =			Di of (50-DN) =
					Select =

Reasoning/Work:

Answer 1