6-38. Two mutually exclusive alternatives for office building refrigeration and air conditioning are being investigated. Their relevant costs and lives are summarized as follows:

Absorption Compression Chilling (AC) Chilling (CC)

Capital investment $60,000 $80,000 Annual operating expenses 40,000 32,000 Salvage (market)

value 10,000 0 Useful life 6 years 9 years If the hurdle rate (MARR) is 15% per year and the study period is 18 years, which chilling system should be recommended? (6.5)