A cheap air conditioner (AC-1) has a lifetime of 20 years (no salvage value after that). The cost of this AC at year-1 is $2,000. A high-performance AC-2 has a lifetime of 30 years (no salvage value after that). The cost of this AC at year-1 is $3,000. Assume the building lifetime is 60 years, AC-2 can save 300kWh/year than AC-1. The currency inflation rate is 3%. The electricity cost is $0.8/kWh at year-1 with an annual growth rate of 5%. Please comment on the selection of the AC with calculation and numbers. What is the simple payback time for choosing the high-performance AC?
A cheap air conditioner (AC-1) has a lifetime of 20 years (no salvage value after that). The cost of this AC at year-1 is $2,000. A high-performance AC-2 has a lifetime of 30 years (no salvage value after that). The cost of this AC at year-1 is $3,000. Assume the building lifetime is 60 years, AC-2 can save 300kWh/year than AC-1. The currency inflation rate is 3%. The electricity cost is $0.8/kWh at year-1 with an annual growth rate of 5%. Please comment on the selection of the AC with calculation and numbers. What is the simple payback time for choosing the high-performance AC?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A cheap air conditioner (AC-1) has a lifetime of 20 years (no salvage value after that). The cost of this AC at year-1 is $2,000. A high-performance AC-2 has a lifetime of 30 years (no salvage value after that). The cost of this AC at year-1 is $3,000. Assume the building lifetime is 60 years, AC-2 can save 300kWh/year than AC-1. The currency inflation rate is 3%. The electricity cost is $0.8/kWh at year-1 with an annual growth rate of 5%. Please comment on the selection of the AC with calculation and numbers. What is the simple payback time for choosing the high-performance AC?
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