An old, heavily used warehouse currently has an incandescent lighting system. The lights run essentially 24 hr/day, 365 days/yr and draw about 10 kW of power. Consideration is being given to replacing these lights with fluorescent lights to save on electricity. It is estimated that the same level of lighting can be achieved with 4.5 kW of fluorescent lights. Replacement of the lights will cost about $11,000. Bulb replacement and other maintenance are not expected to be significantly different. Electricity for the lights currently costs $0.045/kWh. The warehouse is scheduled for demolition in five years to make way for a more modern facility. The company has a MARR of 15%. Should the company replace the incandescent lights with fluorescent lights? State any assumptions you make.
An old, heavily used warehouse currently has an incandescent lighting system. The lights run essentially 24 hr/day, 365 days/yr and draw about 10 kW of power. Consideration is being given to replacing these lights with fluorescent lights to save on electricity. It is estimated that the same level of lighting can be achieved with 4.5 kW of fluorescent lights. Replacement of the lights will cost about $11,000. Bulb replacement and other maintenance are not expected to be significantly different. Electricity for the lights currently costs $0.045/kWh. The warehouse is scheduled for demolition in five years to make way for a more modern facility. The company has a MARR of 15%. Should the company replace the incandescent lights with fluorescent lights? State any assumptions you make.
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