A 2000-gallon metal tank to store hazardous materials was bought 15 years ago at cost of $100,000. What will a 5,000-gallon tank cost today if the power-sizing exponent is 0.57 and the construction cost index for such facilities has increased from 180 to 600 over the last 15 years? Choose the closest value.

Question

Quizplus · Accepted Answer

The cost of the new tank is calculated using the formula: Cost_new = Cost_old * (Size_new/Size_old)^Exponent * (Index_new/Index_old). Plugging in the values: $100,000 * (5000/2000)^0.57 * (600/180) = $561,960.

A 2000-Gallon Metal Tank to Store Hazardous Materials Was Bought