A company is considering installing a solar heating system in its manufacturing plant for space and hot
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Question:
A company is considering installing a solar heating system in its manufacturing plant for space and hot water hearing. There are three possible alternatives as given in the Table below:
| A | B | C | |
| Solar Collector Area | 2,500 ft2 | 3,500ft2 | 4,500 ft2 |
| Storage tank | 1,500 gal | 1,500 gal | 3,000 gal |
| Installed Cost | $20,000 | $25,000 | $50,000 |
| Maintenance Cost | $2,500 | $2,000 | $1,500 |
| Annual savings | 35% | 60% | 85% |
| Useful life | 10 years | 10 years | 10 years |
| Salvage value | 0 | 0 | $5,000 |
Note that the possible energy savings is a function of the size of the solar system installed. It has been determined that the annual heating cost for the plant is worth about $10,000. Use the Present Worth method with i=0 to determine the best alternative.
Expert Answer:
Analyzing Solar Heating System Options using Present Worth Method i 0 We will analyze each alternati... View the full answer
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