A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $120,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.120, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,200 at the end of seven years, and additional annual operating and maintenance expenses are negligible. Use the benefit–cost method to make a recommendation.
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $120,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.120, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,200 at the end of seven years, and additional annual operating and maintenance expenses are negligible. Use the benefit–cost method to make a recommendation.
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
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A retrofitted space-heating system is being considered for a small office building.
The system can be purchased and installed for $120,000, and it will save an
estimated 300,000 kilowatt-hours (kWh) of electric power each year over a
seven-year period. A kilowatt-hour of electricity costs $0.120, and the company
uses a MARR of 15% per year in its economic evaluations of refurbished
systems. The market value of the system will be $8,200 at the end of seven years,
and additional annual operating and maintenance expenses are negligible. Use
the benefit–cost method to make a recommendation.
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