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Business, 10.03.2020 20:21 organicmemez

A municipal power plant uses natural gas from an existing pipeline at an annual cost of

$10,000 per year. A new pipeline would initially cost $35,000, but it would reduce the annual cost to $4,000 per year. Assume an analysis period of 20 years and no salvage value for either pipeline. The interest rate is 7%. Using the equivalent uniform annual cost (EUAC), should the new pipeline be built?

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A municipal power plant uses natural gas from an existing pipeline at an annual cost of

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