A heat exchanger has been designed and insulation is being considered for the unit. The insulation can be obtained in thickness of 1, 2, 3, or 4 in. The following data have been determined for the different insulation thicknesses:
What thickness of insulation should be used? The value of heat is 30 cents/1,000,000 Btu. An annual return of 15 percent on the fixed-capital investment is required for any capital put into this type of investment. The exchanger operates 300 days per year.