Question: A company decided to implement the Energy Saving Measures ( ESM ) recommended by the energy manager. One of the ESM is to install Variable

A company decided to implement the Energy Saving Measures (ESM) recommended by the energy manager. One of the ESM is to install Variable Speed Drive (VSD) to the constant speed chilled water pump system to increase the performance of the system. The VSD can be purchased and installed for a cost of RM70,000. The retrofit system is estimated to save 45,000 kWh per year for its economic life of 10 years. The maintenance costs are RM3,500 per year. The discounted rate is at 3%. The company pays RM0.30 per kWh for electricity, and the system will have a salvage value of RM5,000 at the end of its life. By using the above information, calculate: i. Total cash flow by using cash flow tabular form. ii. Simple payback period, SP. iii. Net Present Value, NPV.

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