EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
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Chapter 5, Problem 25P
A simple, direct space heating system is currently being used in a professional medical office complex. An upgraded “variable air-volume system” retrofit can be purchased and installed for $200,000(investment cost). Its power savings in the future will be 500,000 kilo-Watt hours per year over its estimated life of 8 years. The cost of electricity is $0.10 per kilo-Watt hour. If the firm’s cost of capital is 12% per year and the residual value of the system in 8 years is $20,000, should the new system be purchased? Use the present worth method. (5.3)
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Chapter 5 Solutions
EBK ENGINEERING ECONOMY
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