Project C Replacement Generator

Plant Operations has indicated SUS Hospital is in need of replacement parts for the HVAC system. Although there are much newer and more efficient models, the Plant Operations Director is sure it will save the hospital quite a bit of money to buy replacement parts instead of a brand new system. The parts would cost $145,680 and they are expected to provide cost savings of $15,000 per year for 15 years.

determine using the 4 steps

Estimation of the projects cash flows

Assessment of risk

Estimation of the cost of capital

Determination of the projects profitability