Question
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $135,000, and it will save
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $135,000, and it will save an estimated 315,650 kilowatt-hours (kWh) of electric power each year over a eight-year period. A kilowatt-hour of electricity costs $0.15, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $10,000 at the end of eight years, and additional annual operating and maintenance expenses are negligible. What is the conventional B/C ratio of this system?
1.41
1.55
1.61
1.68
1.72
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