"A manufacturing engineer is choosing between two types of HVAC systems with the following costs and savings. The engineer must choose one of the two HVAC systems. The firm's MARR is 15%. What is the IRR of the system that the engineer should choose? Enter your answer as a percentage between 0 and 100 rounded to the nearest tenth of a percent. Caution: the system with the larger IRR might not be the system that should be chosen! For Model 1:
"A manufacturing engineer is choosing between two types of HVAC systems with the following costs and savings. The engineer must choose one of the two HVAC systems. The firm's MARR is 15%. What is the IRR of the system that the engineer should choose? Enter your answer as a percentage between 0 and 100 rounded to the nearest tenth of a percent. Caution: the system with the larger IRR might not be the system that should be chosen! For Model 1:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
!["A manufacturing engineer is choosing between two types of HVAC systems with the
following costs and savings. The engineer must choose one of the two HVAC systems. The
firm's MARR is 15%. What is the IRR of the system that the engineer should choose? Enter
your answer as a percentage between 0 and 100 rounded to the nearest tenth of a
percent. Caution: the system with the larger IRR might not be the system that should be
chosen!
For Model 1:
Initial investment $13,000
Annual savings $2,200
Annual maintenance $230
Salvage value $900
Project life (years) 13
For Model 2:
Initial investment $6,900
Annual savings $1,200
Annual maintenance $200
Salvage value $800
Project life (years) 13"
16.8](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F575c1b06-095c-42d6-9e51-de38a2fc3bdc%2F5363930e-7822-4973-ae1b-285662bd9151%2Fm5jxgqb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:"A manufacturing engineer is choosing between two types of HVAC systems with the
following costs and savings. The engineer must choose one of the two HVAC systems. The
firm's MARR is 15%. What is the IRR of the system that the engineer should choose? Enter
your answer as a percentage between 0 and 100 rounded to the nearest tenth of a
percent. Caution: the system with the larger IRR might not be the system that should be
chosen!
For Model 1:
Initial investment $13,000
Annual savings $2,200
Annual maintenance $230
Salvage value $900
Project life (years) 13
For Model 2:
Initial investment $6,900
Annual savings $1,200
Annual maintenance $200
Salvage value $800
Project life (years) 13"
16.8
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