An office area in a building has problems associated with the air conditioning system. Currently the existing system is centrifugal. The Department of Buildings and Land is evaluating two alternatives to address the situation. The first alternative is to replace the 50-ton chiller, the handler system and its insulation system. The initial costs are as follows: Unit Centrifuge 50 tons Handlers Installation work Initial Installation Materials ** Insulation system Cost Life $33,000 15 years $47,000 30 years $1,400 n/a $2,500 n/a $22,000 n/a *Reduced to 40% of the original cost in case of equipment replacement. ** The cost of replacement materials is also assumed at 40% of the original cost. The maintenance of the centrifuge consists of Maintenance work Personnel requirements Duration Monthly Cost of work salary Cleaning every 6 months 1 technician 1 day $1,550 1 assistant $1,515 Annual water pump 1 technician 1/2 day $1,550 maintenance Annual visit of the 1 assistant $1,515 $1,000 manufacturer Replacement of fans 1 technician 1 hour $1,550 $150 every three years 1 assistant $1,515 The maintenance is carried out by personnel of the Refrigeration Workshop attached to the Department of Buildings and Land of the land. The total hours that a regular employee works in the Enclosure is 1,950 hours per year, at a rate of 7.5 hours per day. (They will need to calculate the cost associated with the time staff spends on maintaining this particular piece of equipment.) The additional costs associated with the operation of the centrifuge are as follows: Cost item Cold Water Pipe Insulation Frequency Every 5 years Cost $22,000 Replacement The costs associated with the electricity consumption of the centrifuge system are as follows: The cost of a 50-ton centrifuge for daily electricity consumption is $150 per day. The cost for electricity consumption of the driver is $25 per day. The centrifuge system operates continuously.