The owner of an 8-story commercial building in Abu Dhabi has approached you for consultation of...

 

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The owner of an 8-story commercial building in Abu Dhabi has approached you for consultation of whether it is economically feasible to retrofit the building's central air conditioning system. The owner wants to cut in the yearly electricity expenses through installing 12 variable frequency drive (VFD) units to enhance the overall efficiency of the central A/C system. It is expected that the deployment of the VFD units will save up to 30% of the annual energy consumption of the A/C system. Using the information provided in the Table (below), calculate the following: a) The payback period (in years) using the simple (non-discounted) appraisal. b) The payback period (in years) using the discounted cash flow appraisal. Hint: assume a discounted rate of 12% Unit price of the VFD (in AED) Labor and installation charges per unit (in AED) Annual energy consumption of the A/C system prior retrofitting (in MWh) Abu Dhabi Emirate electricity price (in fils/kWh) 5550 560 120 31 The owner of an 8-story commercial building in Abu Dhabi has approached you for consultation of whether it is economically feasible to retrofit the building's central air conditioning system. The owner wants to cut in the yearly electricity expenses through installing 12 variable frequency drive (VFD) units to enhance the overall efficiency of the central A/C system. It is expected that the deployment of the VFD units will save up to 30% of the annual energy consumption of the A/C system. Using the information provided in the Table (below), calculate the following: a) The payback period (in years) using the simple (non-discounted) appraisal. b) The payback period (in years) using the discounted cash flow appraisal. Hint: assume a discounted rate of 12% Unit price of the VFD (in AED) Labor and installation charges per unit (in AED) Annual energy consumption of the A/C system prior retrofitting (in MWh) Abu Dhabi Emirate electricity price (in fils/kWh) 5550 560 120 31

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Price of VFD 5550 12 VFDs installed So Total Price 1275556 ... View the full answer