Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 56

Fort Bliss ,a U.S Army military base,contributed $3.3 million of the $87 million captial cost for a desalting plant constructed and opearted by E1 paso water Utilities (EPWU). In return, EPWU agreed to sell water to Fort Bliss at $0.85 per 1000 gallons for 20 years. If the army base uses 200 million gallons of water per month,what is the Army's cost per month for water The $3.3 million capital cost is amortized at an interest rate of 6% per year, compounded monthly.