Determine whether to utilize no insulation

Reference no: EM13684665

Parker County Community College (PCCC) is trying to determine whether to utilize no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.10 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 76 percent of the loss and will cost $0.25 per foot. A 2-inch thick insulated covering will eliminate 92 percent of the loss and will cost $0.90 per foot. PCCC Physical Plant Services estimates that there are 230,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 9.0 percent/year return to justify capital expenditures. The insulation has a life expectancy of ten years.

a) Cost of No insulation

b) Cost of 1-inch insulation

c) Cost of 2-inch insulation

Reference no: EM13684665

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