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A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,423.00 to
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,423.00 to install, $5,000.00 to operate per year for 7 years at which time it will be sold for $6,936.00. The second, RayCool 8, costs $41,620.00 to install, $2,015.00 to operate per year for 5 years at which time it will be sold for $8,950.00. The firm's cost of capital is 5.68%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes
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