Question: Question 3: [15 Marks] Here are three alternatives for the heating, ventilation, and air conditioning (HVAC) system for a hospital. Alternatives Purchase and Installation

Question 3: [15 Marks] Here are three alternatives for the heating, ventilation,

Question 3: [15 Marks] Here are three alternatives for the heating, ventilation, and air conditioning (HVAC) system for a hospital. Alternatives Purchase and Installation Cost A $2,000,000 B $2,300,000 C $2,250,000 Annual Operating Expense Annual Maintenance Expense Market Value (Salvage Value) Useful Life (years) $ 80,000 $ 50,000 $ 70,000 $ 20,000 $ 14,000 $ 12,000 $ X 57 15 0 $ Y 18 16 a) Determine X by implementing a straight line (SL) depreciation method with an annual depreciation deduction of $130,000. b) Calculate Y by using a 282.9% declining balance (DB) depreciation method. c) Which alternative do you recommend? Use the coterminated life assumption with a study period of 16 years and MARR of 12% per year. State all other assumptions.

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