Compare the economics of the two options

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An energy-efficient air compressor is proposed by a vendor. The compressor will cost $30,000 installed and will require $1,000 worth of maintenance each year for its life of 10 years. Energy costs will be $6,000 per year.

A standard air compressor will cost $25,000 and will require $500 worth of maintenance each year. Its energy costs will be $10,000 per year. If your company uses a MARR of 10%, would you invest in the energy-efficient air compressor?

-Compare the economics of the two options by calculating their simple payback, IRR, NPV, and LCOE (or LCC).

Reference no: EM133048421

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