Consider two air-conditioning systems with the estimates below. (a) Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. (b) Develop the spreadsheet functions that will display the six AW values. System 1 2 First cost, $ −10,000 −17,000 AOC, $ per year −600 −150 Salvage value, $ −100 −300 New compressor and motor cost at midlife, $ −1,750 −3,000 Life, years 8 12
Consider two air-conditioning systems with the estimates below. (a) Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. (b) Develop the spreadsheet functions that will display the six AW values. System 1 2 First cost, $ −10,000 −17,000 AOC, $ per year −600 −150 Salvage value, $ −100 −300 New compressor and motor cost at midlife, $ −1,750 −3,000 Life, years 8 12
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consider two air-conditioning systems with the estimates
below. (a) Use AW analysis to determine
the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. (b) Develop the
spreadsheet functions that will display the six AW
values.
System 1 2
First cost, $ −10,000 −17,000
AOC, $ per year −600 −150
Salvage value, $ −100 −300
New compressor and
motor cost at midlife, $
−1,750 −3,000
Life, years 8 12
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