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Maintenance Costs
<br />Based on 3% of Capital Costs
<br />85,000,000 X .03 = S 15D,000/yr
<br />Operating Costs
<br />Increased Labor
<br />S3U,000 X 1.4 = $ 42,000/yr
<br />year
<br />Increased Power
<br />50 H,P, X 250 day X 16 hr. X 0.746 K.W,
<br />year day 1 H,P.
<br />X 80.06 = $ 8,952/yr
<br />K,W, hr,
<br />Present Worth Costs
<br />Present Worth Factor = (P/A, 10%, 15) = 7.606
<br />_ (P/F, 10%, 15) _ .2394
<br />Present Worth Costs
<br />S 5,000,000
<br />• - 500,000
<br />(.2394) A 5,000,000
<br />- 119,700
<br />+ 150,000 (7.606) +1,140,900
<br />+ 42,000 (7,606) + 319,452
<br />- 8,952 (7,606) - 68,089
<br />S 6,272,563
<br />Present Worth Costs = 86,272,5fi3
<br />COMPARISON OF ALTERNATIVES
<br />EXAMPLE
<br />56,272,563 - 4,031,180 X 100% = 35.7%
<br />6,272,563
<br />This indicates a 35.7 cost savinys by using truck haulage instead
<br />of an overland conveyor,
<br /> EXAMPLE
<br /> DECISION: Condit ions (capital costs, annual cost, tons produced, interest
<br /> rates, contract terms, etc.) must change befo re a new conveyor
<br /> would be cost effective and constructed.
<br /> EXAMPLE CALCl1LATI0N
<br /> Tonnage Level 4lhich Matches Cost of Conveyor and Trucking
<br /> The tonnage rate at which the present worth costs of the overland conveyor
<br /> system equal the present worth costs of the truck haulage system ca n he cal-
<br /> culated.
<br />6
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