A medium sized office building is considering upgrading its HVAC system. It determines that the cost of the upgrade would be $80,000. It assumes a planning horizon of 6 years and a MARR of 10%. At the end of the planning horizon, the system will have a salvage value of $12,000. However, it is unsure of what the energy savings will be due to the upgrade; it estimates that the new HVAC system will save $14,000; $19,000; or $24,000. Compute the present worth in each case, and determine the minimum savings required to justify the upgrade of the HVAC unit. Click here to access the TVM Factor Table calculator. $ If A $14,000, PW = $ If A $19,000, PW = $ If A $24,000, PW = Minimum annual savings required: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is +$10.
A medium sized office building is considering upgrading its HVAC system. It determines that the cost of the upgrade would be $80,000. It assumes a planning horizon of 6 years and a MARR of 10%. At the end of the planning horizon, the system will have a salvage value of $12,000. However, it is unsure of what the energy savings will be due to the upgrade; it estimates that the new HVAC system will save $14,000; $19,000; or $24,000. Compute the present worth in each case, and determine the minimum savings required to justify the upgrade of the HVAC unit. Click here to access the TVM Factor Table calculator. $ If A $14,000, PW = $ If A $19,000, PW = $ If A $24,000, PW = Minimum annual savings required: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is +$10.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A medium sized office building is considering upgrading its HVAC system. It determines that the cost of the upgrade would be $80,000.
It assumes a planning horizon of 6 years and a MARR of 10%. At the end of the planning horizon, the system will have a salvage value of
$12,000. However, it is unsure of what the energy savings will be due to the upgrade; it estimates that the new HVAC system will save
$14,000; $19,000; or $24,000. Compute the present worth in each case, and determine the minimum savings required to justify the
upgrade of the HVAC unit.
Click here to access the TVM Factor Table calculator.
$
If A $14,000, PW =
$
If A $19,000, PW =
$
If A $24,000, PW =
Minimum annual savings required: $
Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is +$10.
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