Heat and Mass Transfer
In heat exchangers, degree of approach is defined as the difference between temperatures of

Hot medium inlet and outlet
Cold water inlet and outlet
Hot medium outlet and cold water outlet
Hot medium outlet and cold water inlet

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Heat and Mass Transfer
In counter flow heat exchangers

Both the fluids at inlet are in their hottest state
Both the fluids at exit are in their hottest state
Both the fluids at inlet (of heat exchanger where hot fluid enters) are in their coldest state
One fluid is in hottest state and other in coldest state at inlet

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