Construction cost of a wastewater treatment plant is: C=1,300,000*Q^0.65, where Q is the capacity of the plant in million gallons per day, MGD, and C is in dollars.
• Demand for plant capacity increases linearly from zero today at 1 MGD per year.
• Under the assumption of either 1 or 4 plant expansions (1×20 MGD or 4×5 MGD) will occur for the next 20 years, determine the break-even interest rate at which the cost of one expansion exactly equals that of four expansions.
• Plot the break-even chart.
• Which plant should the city choose should the interest rate be 6%?