Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 21

A public water utility is trying to decide between two different sizes of pipe for a new water main. A 250-mm line will have an initial cost of $155,000, whereas a 300-mm line will cost $210,000. Since there is more head loss through the 250-mm pipe, the pumping cost is expected to be $3000 more per year than for the 250-mm line. If the lines are expected to last for 30 years, which size should be selected on the basis of a present worth analysis using an interest rate of 10% per year