A retrofitted space-heating system is being considered for a small office building. The system can be...
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A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $110,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,000 at the end of seven years, and additional annual operating and maintenance expenses are negligible. 1. 1-1. (2 points) Use the PW method to determine whether this system should be installed. 1-2. (2 points) What is the minimum annual electrical power savings (in kWh) required to make this project economically acceptable? The MARR == 15% per year and electricity costs $0.10 per kWh. A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $110,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a seven-year period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,000 at the end of seven years, and additional annual operating and maintenance expenses are negligible. 1. 1-1. (2 points) Use the PW method to determine whether this system should be installed. 1-2. (2 points) What is the minimum annual electrical power savings (in kWh) required to make this project economically acceptable? The MARR == 15% per year and electricity costs $0.10 per kWh.
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Answer Solution Initial Investment 110000 3D Annual ... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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