1a.

A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,082.00 to install, $5,160.00 to operate per year for 7 years at which time it will be sold for $7,014.00. The second, RayCool 8, costs $41,239.00 to install, $2,143.00 to operate per year for 5 years at which time it will be sold for $9,065.00. The firms cost of capital is 5.86%. What is the equivalent annual cost of the AC360? Assume that there are no taxes.

1b.

A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,282.00 to install, $5,012.00 to operate per year for 7 years at which time it will be sold for $7,004.00. The second, RayCool 8, costs $41,947.00 to install, $2,113.00 to operate per year for 5 years at which time it will be sold for $9,006.00. The firms cost of capital is 5.57%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes.

Can you help me with these? Thanks!!