What is present expenditure for the auxiliary equipment

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Reference no: EM13151195

A heating system costs $2,000 for installation and has an estimated life of 10 years. By the addition of a specialized energy -saving auxiliary equipment, an annual savings of $200 in operation expense can be realized, and the estimated life of the heating system can be doubled to 20 years. The salvage value of either alternative is negligible at any time. If MARR is 10% per year, what present expenditure for the auxiliary equipment can plan you justify spending? Assume that you need the heating system in?nitely.

Reference no: EM13151195

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