The annual operation costs of an outdated environmental control device is $75,000. Under a proposed emission reduction
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The annual operation costs of an outdated environmental control device is $75,000. Under a proposed emission reduction plan, the installation of a new fan system will require an initial cost of $150,000 and an annual operating cost of $15,000 for the first 5 years. Determine the annualized cost for the new processing system by assuming the system has only 5 years (n) operational life. The interest rate (i) is 7%. The capital recovery factor (CRF) or annual payment of a capital investment can be calculated as follows: i(l + 1) CRF= (1 +i) - 1 where A is the annual cost and P is the present worth. Compare the costs for both the outdated and proposed operations
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