- A Firm Is Considering Replacing The Existing Industrial Air Conditioning Unit They Will Pick One Of Two Units The Firs 1 (27.1 KiB) Viewed 21 times
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,786.00 to install, $5,152.00 to operate per year
for 7 years at which time it will be sold for $6,951.00. The
second, RayCool 8, costs $41,010.00 to install, $2,102.00 to
operate per year for 5 years at which time it will be sold for
$9,055.00. The firm’s cost of capital is 5.08%. What is the
equivalent annual cost of the RayCool8? Assume that there are no
taxes.
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,786.00 to install, $5,152.00 to operate per year for 7 years at which time it will be sold for $6,951.00. The second, RayCool 8, costs $41,010.00 to install, $2,102.00 to operate per year for 5 years at which time it will be sold for $9,055.00. The firm's cost of capital is 5.08%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes. Submit Answer format: Currency: Round to: 2 decimal places.