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1. A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,805
1. A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,805 to install, $5,154 to operate per year for 7 years at which time it will be sold for $6,860. The second, RayCool 8, costs $41,475 to install, $2,081 to operate per year for 5 years at which time it will be sold for $9,039. The firms cost of capital is 6.1%. What is the equivalent annual cost of the AC360? Assume that there are no taxes. Currency: Round to: 2 decimal places.
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