The Mowbot plant must replace ad existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1,900 $1,400 $900 Energy savings/ year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend?
The Mowbot plant must replace ad existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1,900 $1,400 $900 Energy savings/ year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:The Mowbot plant must replace an existing HVAC unit (doing nothing is not an option). You are
evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the
existing equipment.
Alternative
Unit A
Unit B
Unit C
Up front cost
$44,000
$65,000
$84,000
Operating cost/year
$1.900
$1.400
$900
Energy savings / year
$14,000
$16,500
$17,500
Salvage Value
$2,000
$4,000
$5,000
Economic life, years
7.
7.
Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you
recommend?
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