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2. It is estimated that the cost of heating a small factory is S11,500. Proposal 1 will reduce the heat loss by 68% and will
2. It is estimated that the cost of heating a small factory is S11,500. Proposal 1 will reduce the heat loss by 68% and will cost $3,750. Proposal 2 wil!reduce the heat loss by 47% and cost $3,000. For an interest rate of 10% and a lifetime of 10 years, which proposal should be selected? Calculate your answer three ways. a. Using present worth on incremental investment b. Using annual equivalent on incremental investment c. Using IRR on incremental investment
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