A public water utility is trying to decide between
two different sizes of pipe for a new water main. A
250-mm line will have an initial cost of $155,000,
whereas a 300-mm line will cost $210,000. Since
there is more head loss through the 250-mm pipe,
the pumping cost is expected to be $3000 more per
year than for the 250-mm line. If the lines are
144 Chapter 5 Present Worth Analysis
expected to last for 30 years, which size should be
selected on the basis of a present worth analysis
using an interest rate of 10% per year?