A chiller consumes 9.5 10 5 kWh annually with an overall efficiency of 0.90 kW/ton. If

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A chiller consumes 9.5 × 105 kWh annually with an overall efficiency of 0.90 kW/ton. If this chiller is replaced by a more energy-efficient chiller (0.75 kW/ton) at a cost of $95,000, determine the following:

a. The SPB of the chiller replacement.

b. If the expected life of the old chiller is 15 years, is it cost-effective to replace the chiller in an economy with a discount rate of 7 percent?

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