Present worth and equivalent uniform annual cost analysis

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Reference no: EM131000459

Currently a heating unit for a small building is very old and inefficient. The owner is contemplating on replacing it with a variable air volume system that costs $100,000 and will save 450,000 kWh each year. The cost of electricity is $0.06 per kWh. The life expectancy of the new unit is 10 years and will have a salvage value of $500. If the interest rate is 10% will the new system be cost effective. Base your decision on the (a) present worth analysis and (b) equivalent uniform annual cost analysis.

Reference no: EM131000459

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Present worth and equivalent uniform annual cost analysis : Currently a heating unit for a small building is very old and inefficient. The owner is contemplating on replacing it with a variable air volume system that costs $100,000 and will save 450,000 kWh each year. Base your decision on the (a) present wor..

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