MIL-HDBK-1004/10
Alternative 2
Discount
Discounted
Project
Cost
Amount
Year(s)
Element
One-Time
Recurring
Factor
Cost
0
Installation
6,000
1.000
$
986,000
1-25
Maintenance
,800
9.524
36,191
15
Rehabilitation
12,000
0.251
3,012
Total Net Present Value:
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,025,203
13.6.5
Compare Costs/Benefits
a)
Alternative 1 - Net present value =
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,040,090
b)
Alternative 2 - Net present value =
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,025,203
Alternative 2, installation of a steel line, with a galvanic anode cathodic
protection system, suggests the least life-cycle cost proposal.
13.7
Economic Analysis - Example 4
13.7.1
Objective. Determine whether cathodic protection should be
continued on a steel fuel pipeline, 8 inches in diameter and 15,000 feet long.
13.7.2
Alternatives
a)
Cathodic protection system maintenance continued.
b)
Cathodic protection system maintenance discontinued.
13.7.3
Assumptions
a)
Same assumptions as in para. 13.5.3.
b)
Next major rehabilitation, on existing line, required in 7
years.
13.7.4
Cost/Benefit Analysis
13.7.4.1
Cost - Alternative 1--Cathodic Protection System Maintenance
Continued. Annual cost of cathodic protection system maintenance - ,500.
Major rehabilitation of cathodic protection system every 15 years - ,000.
Salvage value of steel line - ,000.
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