A detached warehouse cooling system station was destroyed by highwater flooding, and that substation will have to
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A detached warehouse cooling system station was destroyed by highwater flooding, and that substation will have to be scrapped and entirely re-built. If the original system is replaced the substation will cost
\($50,000\) and it is estimated that with maintenance of \($2,800\) annually the substation will be good for 15 years. If a more modern \ flood-proof" system is purchased at \($75,000,\) then the maintenance drops by \($1,800\) to\($1,000\) annually. Under the assumption the company has a 10% MARR, what is the IRR of building the floodproof version of the substation?
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