Question

A circulating heating loop for an endothermic reactor has been in operation for several years. Due to an oversight in the design phase, a certain portion of the heating loop piping was left uninsulated. The consequence is significant energy loss. Two types of insulation can be used to reduce the heat loss. They are both available in two thicknesses. The estimated cost of the insulation and the estimated yearly savings in energy costs are given in Table below. Assume an acceptable rate of return to be 15% (0.15). Determine the best option to select using method of return on incremental investment and incorporating minimum return as a cost? Ranking (Option #) Alternative Insulation Project Cost Yearly Savings Generated by Project 1 B-1" Thick $3000 $1400 2 B-2" Thick $5000 $1900 3 A-1" Thick $6000 $2000 4 A-2" Thick $9700 $2400

          A circulating heating loop for an endothermic reactor has been in operation for several years. Due to an oversight in the design phase, a certain portion of the heating loop piping was left uninsulated. The consequence is significant energy loss. Two types of insulation can be used to reduce the heat loss. They are both available in two thicknesses. The estimated cost of the insulation and the estimated yearly savings in energy costs are given in Table below. Assume an acceptable rate of return to be 15% (0.15). Determine the best option to select using method of return on incremental investment and incorporating minimum return as a cost?

Ranking (Option #)	Alternative Insulation	Project Cost	Yearly Savings Generated by Project
1	B-1" Thick	$3000	$1400
2	B-2" Thick	$5000	$1900
3	A-1" Thick	$6000	$2000
4	A-2" Thick	$9700	$2400

a circulating heating loop for an endothermic reactor has been in operation for several years due to an oversight in the design phase a certain portion of the heating loop piping was left un 64785

Added by Adam J.

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