An office building is considering converting from a coal-burning furnace to one that burns either fuel oil or natural gas. The cost of j converting to fuel oil is estimated to be $80,000 initially; annual operating expenses are estimated to be 54,000 less than that experienced when using the coal furnace. Approximately 140,000 Btus are produced per gallon of fuel oil; fuel oil is anticipated to cost 52.20 per gallon.
The cost of converting to natural gas is estimated to be $60,000 initially; additionally, annual operating and maintenance expenses are estimated to be 56,000 less than that for the coal-burning furnace. Approximately 1,000 Btus are produced per cubic foot of natural gas; it is estimated that natural gas will cost 50.04 per cubic foot.
A planning horizon of 20 years is to be used. Zero market values and a MARR of 10% per year fare appropriate. Perform a sensitivity analysis for the annual Btu requirement for the heating system.