Explain which is the most economical installation

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A steam boiler is needed as part of the design of a new plant. The boiler can be fired by natural gas, fuel, or coal. A decision must be made on which fuel to use. An analysis of costs shows that the installed cost, with all controls, would be at least for natural gas at 30000, for fuel oil it would be 55000, and for coal it would be 180000. If natural gas is used rather than fuel oil, the annual fuel cost will increase by 7500. If coal is used rather than fuel oil, the annual fuel cost will be 15000 per year less. Assuming 8% interest and a 20-year analysis period, and no salvage value, which is the most economical installation?

Reference no: EM13237058

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