Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 35

Logan Well Services Group is considering two sites for storage and recovery of reclaimed water. The mountain site (MS) will use injection wells that cost $4.2 million to develop and $280,000 per year for M O costs. This site will be able to accommodate 150 million gallons per year. The valley site (VS) will involve recharge basins that cost $11 million to construct and $400,000 to operate and maintain. At this site, 890 million gallons can be injected each year. If the value of the injected water is $3.00 per 1000 gallons, which alternative, if either, should be selected according to the B/C ratio method Use an interest rate of 8% per year and a 20-year study period.