A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The firs
Posted: Thu Apr 28, 2022 1:58 pm
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,493.00 to install, $5,127.00 to operate per year
for 7 years at which time it will be sold for $7,122.00. The
second, RayCool 8, costs $41,448.00 to install, $2,057.00 to
operate per year for 5 years at which time it will be sold for
$9,007.00. The firm’s cost of capital is 6.22%. What is the
equivalent annual cost of the AC360? Assume that there are no
taxes.
round to two decimals
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,493.00 to install, $5,127.00 to operate per year
for 7 years at which time it will be sold for $7,122.00. The
second, RayCool 8, costs $41,448.00 to install, $2,057.00 to
operate per year for 5 years at which time it will be sold for
$9,007.00. The firm’s cost of capital is 6.22%. What is the
equivalent annual cost of the AC360? Assume that there are no
taxes.
round to two decimals