A mechanical engineer is considering two sizes of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valve and other appurtenances), but will have a high head loss and, therefore, a higher pumping cost. The small pipeline will cost $1.7 million installed and have an operating cost of $12,000 per month. A large diameter pipeline will cost $2.1 million installed, but its operating cost will be only 8,000 per month. Which pipe size is more economical at an interest rate of 1% per month on the basis of an annual worth analysis? Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10 year project.