An environmental engineer is considering three methods for disposing of a nonhazardous chemical sludge: land application, fluidized-bed incineration, and private disposal contract. The estimates for each method are below. (a) Determine which has the least cost on the basis of an annual worth comparison at 10% per year. (b) Determine the equivalent present worth value of each alternative using its AW value

The annual worth of land application = $ 110,000 (A/P, 10%, 5 years) + $ 95,000 - $ 15,000 (A/F, 10%, 5 years)

The annual worth of land application = $ 110,000 X 0.263797 + $ 95,000 - $ 15,000 X 0.163797

The annual worth of land application = $ 29,017.54 + $ 95,000 - $ 2,456.95

The annual worth of land application = $ 121,560.59

The annual worth of land Incineration = $ 800,000 (A/P, 10%, 6 years) + $ 60,000 - $ 250,000 X (A/F, 10%, 6 years)

The annual worth of land Incineration = $ 800,000 X 0.229607 + $ 60,000 - $ 250,000 X 0.129607

The annual worth of land Incineration = $ 211,283.85

The annual worth of contract = $ 190,000

The annual worth of contract = $ 190,000

The land application has the least cost, hence it is preferred.