Question
A small heat pump, including the duct system, now costs $2,800 to purchase and install. It has a useful life of 12 years and incurs
A small heat pump, including the duct system, now costs $2,800 to purchase and install. It has a useful life of 12 years and incurs annual maintenance expenses of $75 per year in real (year-zero) dollars over its useful life. A compressor replacement is required at the end of years 4 and 8 at a cost of $600 each in real dollars. The annual cost of electricity for the heat pump is $720 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 9%. All other costs are expected to increase at 4%, which is the projected general price inflation rate. The firm's MARR, which includes an allowance for general price inflation, is 12% per year. No market value is expected from the heat pump at the end of the 12 years of service life.
What is the PW of owning and operating the heat pump? (Express cost as negative; Round to the nearest dollar)
What is the AW (In actual Dollars) of owning and operating the Heart pump? (Express cost as negative; Round to the nearest dollar)
What is the AW (in real Dollars) of owning and operating the heat pump? (Express cost as negative; Round to the nearest dollar)
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