Two design options for a distillation system are being compared based on the total annual cost.Information available is as follows:The annual fixed charge amounts to 12% of the installed cost. Based on the above information,what is the total annual cost (Rs in lakhs /year) of the better option?a)40b)42.4c)92d)128Correct answer is option 'A'. Can you explain this answer?

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Two design options for a distillation system are being compared based on the total annual cost.
Information available is as follows:

The annual fixed charge amounts to 12% of the installed cost. Based on the above information,
what is the total annual cost (Rs in lakhs /year) of the better option?

a)
40
b)
42.4
c)
92
d)
128

Correct answer is option 'A'. Can you explain this answer?

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Two design options for a distillation system are being compared based ...

Option P: Annual fixed charge = 12% of Rs 150 lakh
= 0.12 × 150
= Rs 18 lakh
Then, total annual cost (in lakhs/year)
= 18 + 6 +16 = 40
Option Q: Annual fixed charge = 12% of Rs 120 lakhs

= 0.12 × 120
=Rs 14.4 lakh
Then, total annual cost = 14.4 + 8 + 20 = 42.4 (in lakh/year)
Thus, option P is better, with lesser annual cost of Rs 40 lakh/year.

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Two design options for a distillation system are being compared based on the total annual cost.Information available is as follows:The annual fixed charge amounts to 12% of the installed cost. Based on the above information,what is the total annual cost (Rs in lakhs /year) of the better option?a)40b)42.4c)92d)128Correct answer is option 'A'. Can you explain this answer?

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