Question

Please provide a CFD (Cash Flow Diagram) in addition to your solution. Thank You.

Problem-2 A chemical engineer is considering two styles of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valves and other appurtenances) but will have a high head loss and, therefore, a higher pumping cost. The small pipeline will cost $1.7 million installed and will have an operating cost of $12,000 per month. A larger-diameter pipeline will cost $2.1 million installed, but its operating cost will be only $8000 per month. Which pipe size is more economical at an interest rate of 1% per month on the basis of an annual worth analysis? Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10-year project period. Answer: CFD:

Answer 1

"w small = -1700000 -12000 (PA, 17., 120) +170,000(PL,17120) 0.3030) 5-1700000 -12000 (69.7005) +1700000 ( R Pusmall - $ - 2,484, 896 Pw large = - 2100,000 - 8000 (PA, 17:120) + 210,000 (PIE, 17.120) = -2,100,000 - 8000 (69.7005) + 210,000 (0.3030) Pwlarge = $- 2,593,9 74 therefore bettes) The small pipe size costs less and is deal.