Work Problem 6 38 by using the internal rate of return (IRR) method The MARR is 15 per year Remember to think incrementally Data from Problem 6 38 Two mutually exclusive alternatives for office building refrigeration and air conditioning are being investigated Their relevant costs and lives are summarized as follows If the hurdle rate (MARR) is 15 per year and the study period is 18 years, which chilling system should be recommended Absorption Compression Chilling (AC) Chilling (CC) Capital investment $80,000 $60,000 Annual operating 40,000 32,000 expenses Salvage (market) value 10,000 9 years Useful life 6 years

Question: Work Problem 6-38 by using the internal rate of return (IRR) method. The MARR is 15% per year. Remember to think incrementally! Data from Problem

Work Problem 6-38 by using the (IRR) method. The is 15% per year. Remember to think incrementally!

Data from Problem 6-38:

Two mutually exclusive alternatives for office building refrigeration and air conditioning are being investigated. Their relevant costs and lives are summarized as follows:

Absorption Compression Chilling (AC) Chilling (CC) Capital investment $80,000 $60,000 Annual operating 40,000 32,000 exp

If the hurdle rate (MARR) is 15% per year and the study period is 18 years, which chilling system should be recommended?

Absorption Compression Chilling (AC) Chilling (CC) Capital investment $80,000 $60,000 Annual operating 40,000 32,000 expenses Salvage (market) value 10,000 9 years Useful life 6 years

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