What is the equivalent annual cost of the raycool

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Question - A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,427.00 to install, $5, 140.00 to operate per year for 7 years at which time it will be sold for $7,059.00. The second, RayCool 8, costs $41,311.00 to install, $2,086.00 to operate per year for 5 years at which time it will be sold for $8,903.00. The firm's cost of capital is 6.63%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes.

Reference no: EM133071081

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