Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 49

Water for Semiconductor Manufacturing Case
Throughout the present worth analyses, the decision between seawater and groundwater switched multiple times in Examples 5.2 and 5.4. A summary is given here in $1 million units. The confusion about the recommended source for UPW has not gone unnoticed by the general manager. Yesterday, you were asked to settle the issue by determining the first cost X S of the seawater option to ensure that it is the economic choice over groundwater. The study period is set by the manager as 10 years, simply because that is the time period on the lease agreement for the building where the fab will be located. Since the seawater equipment must be refurbished or replaced after 5 years, the general manager told you to assume that the equipment will be purchased anew after 5 years of use. What is the maximum first cost that Angular Enterprises should pay for the seawater option