A 300-ton chiller with 1.2 kW/ton average seasonal efficiency is operated 3,500 hours per year with an average load factor of 70 percent. This chiller needs to be replaced by either chiller A or chiller B. The manufacturers indicated that the IPLV for chiller A is 4.14 and for chiller B is 4.69.

a. Estimate the energy cost savings due to replacing the existing chiller with chiller A or with chiller B. The electricity cost is $0.09/kWh.

b. The cost differential between chiller B and A is $25,000. Determine if it is cost-effective to replace the existing chiller with chiller B rather than chiller A. For this question, a simple payback analysis can be used.

c. If the discount rate is 6 percent, determine the electricity price at which it is more cost-effective to replace the existing chiller with chiller A rather than chiller B. Assume a life cycle of ten years for both the chillers.