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3. The alternatives for an engineering project to recover most of the energy presently being lost in the primary cooling stage of a chemical processing system have been reduced to three designs. The estimated capital investment amounts and annual expense savings are shown below: Design EOY ER1 -$98,000 $23,500 ER2 -$115,000 $28,850 ER3 -$81,200 $22,750 2-6 Uniform annual saving of $22,750 $25,800 in year two, and increasing at the rate of 6% per year thereafter till year six $29,000 in year two, and increasing by $150 per year thereafter till year six 7 $34,526 $29,750 $24,750 Assume that MARR is 12% per year, the study period seven years, and the market value is zero for all three designs. Use the PW method to determine the preferred alternative. (5 marks) 3. The alternatives for an engineering project to recover most of the energy presently being lost in the primary cooling stage of a chemical processing system have been reduced to three designs. The estimated capital investment amounts and annual expense savings are shown below: Design EOY ER1 -$98,000 $23,500 ER2 -$115,000 $28,850 ER3 -$81,200 $22,750 2-6 Uniform annual saving of $22,750 $25,800 in year two, and increasing at the rate of 6% per year thereafter till year six $29,000 in year two, and increasing by $150 per year thereafter till year six 7 $34,526 $29,750 $24,750 Assume that MARR is 12% per year, the study period seven years, and the market value is zero for all three designs. Use the PW method to determine the preferred alternative

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