Question: A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $130,000, and it will save

A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $130,000, and it will save an estimated 310,000 kilowatt-hours (kWh) of electric power each year over a four-year period. A kilowatt-hour of electricity costs $0.07, and the company uses a MARR of 17% per year in its economic evaluations of refurbished systems. The market value of the system will be $7,000 at the end of four years, and additional annual operating and maintenance expenses are negligible. Use the benefit-cost method to make a recommendation. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 17% per year (Round to two decimal places.) The benefit-cost ratio of the system with PW is
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
