QUESTION: A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $110,000, and it will save an estimated 300,000...


QUESTION:<br>A retrofitted space-heating system is being considered for a small office<br>building. The system can be purchased and installed for $110,000, and it will save an<br>estimated 300,000 kilowatt-hours (kWh) of electric power each year over a six-year<br>period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15%<br>per year in its economic evaluations of refurbished systems. The market value of the<br>system will be $ 0 at the end of six years, and additional annual operating and<br>maintenance expenses are negligible. Use the Future Worth (FW) method to determine<br>whether this system should be installed or not.<br>

Extracted text: QUESTION: A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $110,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a six-year period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $ 0 at the end of six years, and additional annual operating and maintenance expenses are negligible. Use the Future Worth (FW) method to determine whether this system should be installed or not.

Jun 06, 2022
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