Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 40

The local government of Santa Catalina Island, off the coast of Long Beach, California, is completing plans to build a desalination plant to help ease a critical drought on the island. The drought has combined with new construction on Catalina to leave the island with an urgent need for a new water source. On Catalina, the cost of acquiring water from natural sources is about the same as that for desalting. The $5 million plant, with a daily desalting capacity of 0.4 acre-foot, can produce 132,000 gallons of fresh water a day (enough to supply 295 households daily), more than a quarter of the island's total needs. The desalination plant has an estimated service life of 20 years with no appreciable salvage value. The annual operating and maintenance costs would be about $250,000. Assuming an interest rate of 10%, what should be the minimum monthly water bill for each household