A meat packing plant manager is trying to decide between twodifferent methods for cooling cooked hams. the spray methodinvolves spraying water over the hams until the ham temperature isreduced to 30 degrees Celcius. With this method approximately 80liters of water are required for each ham.
Alternatively, an immersion method can be used in which only 16liters of water are required per ham. However, this method willrequire an initial extra investment of $2,000 and extra overhaulexpenses of $100 per year, with the equipment expected to last 10years. The company cooks 10 million hams per year and pays $0.12per 1000 liters for water. The company must also pay $0.04 per 1000liters for wastewater discharged. If the company's minimumattractive rate of return is 15% per year, which method of collingshould be used?