6. A certain building has an old heating system. Annual cost of heating the building is currently $26,000 on average. An energyconsultant estimates that the heating bill can be reduced to $10,000 a year if $49,000 is invested to convert the old heatingsystem to a new one. If the new heating system is adopted, there will be an extra maintenance fee of $2,000 each year.Both the old and new systems will have a zero salvage value at the end of their service lives and again both of them areexpected to serve for a maximum of 20 years starting from now. What is the net annual equivalent worth for this investmentin the new heating system, assuming a MARR of 11%?The annual net worth of installing the new heating system is $(Round to the nearest dollar.)

The measure of money today that is comparable in worth to an installment, or to a surge of…

building has an old heating system. Annual cost of heating the building is currently $26,000 on average. t estimates that the heating bill can be reduced to $10,000 a year if $49,000 is invested to convert the o a new one. If the new heating system is adopted, there will be an extra maintenance fee of $2,000 eac old and new systems will have a zero salvage value at the end of their service lives and again both of th to serve for a maximum of 20 years starting from now. What is the net annual equivalent worth for this i w heating system, assuming a MARR of 11%? al net worth of installing the new heating system is $ . (Round to the nearest dollar.)

building has an old heating system. Annual cost of heating the building is currently $26,000 on average. t estimates that the heating bill can be reduced to $10,000 a year if $49,000 is invested to convert the o a new one. If the new heating system is adopted, there will be an extra maintenance fee of $2,000 eac old and new systems will have a zero salvage value at the end of their service lives and again both of th to serve for a maximum of 20 years starting from now. What is the net annual equivalent worth for this i w heating system, assuming a MARR of 11%? al net worth of installing the new heating system is $ . (Round to the nearest dollar.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. You purchased a building five years ago for $100,000. Its annual maintenance expense has been $5,000 per year. At the end of three years, you spent $9,000 on roof repairs. At the end of five years (now), you sell the building for $120,000. During the period of ownership, you rented the building for $10,000 per year paid at the beginning of each year. Use the AW method to evaluate this investment when your MARR is 12% per year.
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