Answer Happy

Your company is environmentally conscious and is considering two heating options for a new research building. What you know about each option is below, and your company will use an annual interest rate (MARR) of 10% for this decision. Which is the lower cost option for the company? i Click the icon to view the additional information about the options. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year.
Gas Heating Option: The initial equipment and installment of the natural gas system would cost $210,000 right now. The maintenance costs of the equipment are expected to be $3,000 per year, starting next year, for each of the next 19 years. The energy cost is expected to be $4,000 starting next year and is expected to rise by 8% per year for each of the next 19 years due to the price of natural gas increasing. Geothermal Heating Option: Because of green energy incentives provided by the government, the geothermal equipment and installation are expected to cost only $170,000 right now, which is cheaper than the gas lines. There would be no energy cost with geothermal, but because this is a relatively newer technology the maintenance is expected to be $12,000 per year, staring next year, for each of the next 19 years.
N 1 819GAW N 2 3 4 5 6 7 9 · 10 11 12 12 13 14 15 16 17 18 19 20 Single Payment Compound Amount Factor To Find F Given P F/P 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 Present Worth Factor To Find P Given F P/F 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.3405 0.3152 0.2919 0.2703 0.2502 0.2317 0.2145 Discrete Compounding; i = 8% Uniform Series Compound Amount Factor To Find F Given A FIA 1.0000 2.0800 3.2464 4.5061 5.8666 7.3359 8.9228 10.6366 12.4876 14.4866 16.6455 18.9771 21.4953 24.2149 27.1521 30.3243 33.7502 37.4502 41.4463 45.7620 Present Worth Factor To Find P Given A P/A 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.1390 7.5361 7.9038 8.2442 8.5595 8.8514 9.1216 9.3719 9.6036 9.8181 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4808 0.3080 0.2219 0.1705 0.1363 0.1121 0.0940 0.0801 0.0690 0.0601 0.0527 0.0465 0.0413 0.0368 0.0330 0.0296 0.0267 0.0241 0.0219 Capital Recovery Factor To Find A Given P A/P 1.0800 0.5608 0.3880 0.3019 0.2505 0.2163 0.1921 0.1740 0.1601 0.1490 0.1401 0.1327 0.1265 0.1213 0.1168 0.1130 0.1096 0.1067 0.1041 0.1019 Uniform Gradient Gradient Gradient Uniform Present Series Factor Worth Factor To Find P Given G P/G 0.0000 0.8573 2.4450 4.6501 7.3724 10.5233 14.0242 17.8061 21.8081 25.9768 30.2657 34.6339 39.0463 43.4723 47.8857 52.2640 56.5883 60.8426 65.0134 69.0898 To Find A Given G A/G 0.0000 0.4808 0.9487 1.4040 1.8465 2.2763 2.6937 3.0985 3.4910 3.8713 4.2395 4.5957 4.9402 5.2731 5.5945 5.9046 6.2037 6.4920 6.7697 7.0369
N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Single Payment Compound Amount Factor To Find F Given P F/P 1.1000 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 4.5950 5.0545 5.5599 6.1159 6.7275 Present Worth Factor To Find P Given F P/F 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 Discrete Compounding; i = 10% Uniform Series Compound Amount Factor To Find F Given A FIA 1.0000 2.1000 3.3100 4.6410 6.1051 7.7156 9.4872 11.4359 13.5795 15.9374 18.5312 21.3843 24.5227 27.9750 31.7725 35.9497 40.5447 45.5992 51.1591 57.2750 Present Worth Factor To Find P Given A P/A 0.9091 1.7355 2.4869 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 6.4951 6.8137 7.1034 7.3667 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4762 0.3021 0.2155 0.1638 0.1296 0.1054 0.0874 0.0736 0.0627 0.0540 0.0468 0.0408 0.0357 0.0315 0.0278 0.0247 0.0219 0.0195 0.0175 Capital Recovery Factor To Find A Given P A/P 1.1000 0.5762 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 0.1408 0.1357 0.1315 0.1278 0.1247 0.1219 0.1195 0.1175 Uniform Gradient Gradient Present Worth Factor To Find P Given G P/G 0.0000 0.8264 2.3291 4.3781 6.8618 9.6842 12.7631 16.0287 19.4215 22.8913 26.3963 29.9012 33.3772 36.8005 40.1520 43.4164 46.5819 49.6395 52.5827 55.4069 Gradient Uniform Series Factor To Find A Given G A/G 0.0000 0.4762 0.9366 1.3812 1.8101 2.2236 2.6216 3.0045 3.3724 3.7255 4.0641 4.3884 4.6988 4.9955 5.2789 5.5493 5.8071 6.0526 6.2861 6.5081
The PW of the Gas Heating Option is $ The PW of the Geothermal Heating Option is $ The lower cost alternative is the ( Round to the nearest dollar.) (Round to the nearest dollar.) option.