An empirical expression that is sometimes used to estimate the base cost of a shell and tube heat exchanger is (Corripio, Chrien, and Evans 1982), In this equation, cHX is the heat exchanger cost in...

An empirical expression that is sometimes used to estimate the base cost of a shell and tube heat exchanger is (Corripio, Chrien, and Evans 1982),

In this equation, cHX is the heat exchanger cost in U.S. dollars, and A is the heat transfer area in square meters. Consider a shell and tube heat exchanger with a heat transfer area of 400 m2. The heat exchanger has a life of 25 years, with a salvage value equal to 5% of its initial cost. The annual operation and maintenance costs are anticipated to be 15% of the initial cost. The after-tax rate of return is 14.1%. The company’s tax rate is 52% and SLD is used for depreciation. For this heat exchanger, the tax life is 20 years and the salvage value is $6,500. Determine the uniform annual savings resulting from this heat exchanger.