For the FOUNDATION Fieldbus H1 installation analyzed in Problem 9.27, do the following using a spreadsheet:

(a) Find the PI for the first 6 years of operation.

(b) Find the required ?NCF for next year if Dickinson plans to invest an additional $150,000 in year 7 and wants to realize an increase in profitability such that PI = 1.20.



Dickinson, a large oil and gas drilling and operating corporation, has invested over the past 6 years in the installation and operation of a FOUNDATION Fieldbus H1 (FF H1) system developed by Pepperl+Fuchs of Germany. A project engineer has collected information on annual net cash flow increases (?NCF) gener­ated by the FF H1 system and the annual invest­ments made by Dickinson in the system. At an interest rate of 10% per year, determine the PI of this endeavor. Has it proven to be economically worthwhile?




All monetary units are $10,000


(a) PI computation, 6 years (b) Goal Seek finds year 7 ?NCF = $24.19 for PI = 1.20

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