1.2. Allamuchy Township needs more water from Ahote Creek. The town engineer has
ID: 1150047 • Letter: 1
Question
1.2. Allamuchy Township needs more water from Ahote Creek. The town engineer has selected two plans for comparison: a gravity plan (divert water at a point 10 miles up Ahote Creek and pipe it by gravity to the town) and a pumping plan (divert water at a point closer to town). The pumping plant would be built in two stages, with half- capacity installed initially and the other half installed 10 years later. The analysis will assume a 40-year life, 10% interest, and no salvage value. Use an annual cash flow analysis to find which plan is more economical. Gravity $5,400,000.00 Pumping $2,500.000.00 $400,000.00 $48,000.00 Initial Investment Additional investment 10th year Annual O&M; Power Cist per year Average first 10 years Average next 40 years $23,000.00 $90,000.00 $280,000.00 a) Calculate the EUAC of the gravity plan. [2 points] b) Calculate the EUAC of the pumping plan. [2 points] c) Which plan should be adopted and why? [1point+1 points]Explanation / Answer
(a) Gravity
EUAC = [5,400,000 x A/P (10%, 40)] + 23,000 = (5,400,000 x 0.1023**) + 23,000 = 552,420 + 23,000
EUAC = $575,420
(b) Pumping
EUAC = [2,500,000 x A/P(10%, 40)] + [400,000 x P/F(10%, 10) x A/P(10%, 40)] + [48,000] + [90,000 x P/A(10%, 10) x P/F(10%, 10) x A/P(10%, 40)] + [280,000 x P/A(10%, 30)# x P/F(10%, 20) x A/P(10%, 40)]
EUAC = [2,500,000 x 0.1023**] + [400,000 x 0.3855** x 0.1023**] + [48,000] + [90,000 x 6.1446** x 0.3855** x 0.1023** + 280,000 x 9.4269** x 0.1486** x 0.1023**]
EUAC = 255,750 + 15,775 + 48,000 + 21,809 + 40,126
EUAC = $381,460
(c) Pumping, as a plan, is adopted because it has a lower EUAC than the gravity plan.
# Power cost is considered at $280,000 per year for 30 years only because the analysis period is of 40 years.
**Determined from A/P, P/F and P/A factor tables.
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