A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $95,000, and it will save an estimated 150,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.12, and the company uses a MARR of 12% per year in its economic evaluations of refurbished systems. The market value of the system will be $19,000 at the end of seven years, and additional operating and maintenance expenses are $10,500 per year. Use the benefit-cost method to make a recommendation. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12per year. The conventional B-C ratio of the system is 1.48. (Round to two decimal places.) This B-C ratio indicates that the project is not acceptable

A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $95,000, and it will save an estimated 150,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.12, and the company uses a MARR of 12% per year in its economic evaluations of refurbished systems. The market value of the system will be $19,000 at the end of seven years, and additional operating and maintenance expenses are $10,500 per year. Use the benefit-cost method to make a recommendation. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12per year. The conventional B-C ratio of the system is 1.48. (Round to two decimal places.) This B-C ratio indicates that the project is not acceptable

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR). (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR). include the cash flow diagram and conclusion
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( E=MARR). (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)
You purchased a building five years ago for $200,000. Its annual maintenance expense has been $15,000 per year. At the end of three years, you spent $55,000 on roof repairs. At the end of five years (now), you sell the building for $250,000. During the period of ownership, you rented out the building for $60,000 per year paid at the beginning of each year. If your MARR is 8% per year. a) Use the PW and AW methods to evaluate this investment. b) Calculate IRR and ERR(( Ԑ=MARR).
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QUESTION 1 A new production system for a factory is to be purchased and installed for $163,086. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. ASsume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,432 at year 6. Using the PW method to analyzes if this investment is economically justified A calculate the PW of the above investment and insert the result below. I
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