Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of theeconomic decision to MARR values of 4%, 6%, and 8% per year.Air-Conditioning System 1SystemFirst cost, $AOC. $ per yearSalvage valué, $New compressor and motor cost atmidlife, $Life, years-9,000-850-100Proy-2,2008The annual worth of air-conditioning system 1 when the MARR is 4% is $The annual worth of air-conditioning system 2 when the MARR is 4% is $The annual worth of air-conditioning system 1 when the MARR is 6% is $The annual worth of air-conditioning system 2 when the MARR is 6% is $10wwwAir-Conditioning System 2-13,000-105-300-3,14012

Annual worth is the net of all the costs and benefits an investment or asset faces over a year. The…

Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage valué, $ New compressor and motor cost at midlife, $ Life, years -9,000 -850 -100 -2,200 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ Air-Conditioning System 2 -13,000 -105 -300 -3,140 12

Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage valué, $ New compressor and motor cost at midlife, $ Life, years -9,000 -850 -100 -2,200 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ Air-Conditioning System 2 -13,000 -105 -300 -3,140 12

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the
economic decision to MARR values of 4%, 6%, and 8% per year.
Air-Conditioning System 1
System
First cost, $
AOC. $ per year
Salvage valué, $
New compressor and motor cost at
midlife, $
Life, years
-9,000
-850
-100
Proy
-2,200
8
The annual worth of air-conditioning system 1 when the MARR is 4% is $
The annual worth of air-conditioning system 2 when the MARR is 4% is $
The annual worth of air-conditioning system 1 when the MARR is 6% is $
The annual worth of air-conditioning system 2 when the MARR is 6% is $
10
www
Air-Conditioning System 2
-13,000
-105
-300
-3,140
12

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