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An office building is considering converting from a coal-burning furnace to one that burns either fuel oil or natural gas. The cost of converting to
An office building is considering converting from a coal-burning furnace to one that burns either fuel oil or natural gas. The cost of converting to fuel oil is estimated to be $85,000 initially; annual operating expenses are estimated to be $4,000 less additionally, annual operating and maintenance expenses are estimated to be $6,000 less than that for the coal-burning furnace. Approximately 1,000 Btus are produced per cubic foot of natural gas it is estimated that natural gas will cost $0.05 per cubic foot. A planning horizon of 22 years is to be used. Zero market values and a MARR of 9% per year are appropriate. Perform a sensitivity analysis for the annual Btu requirement for the heating system. (Hint First calculate the breakeven number of Btus (in thousands). Then determine AWS if Btu requirement varies over 30% of the breakeven amount.) Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year The breakeven number of Btus is million Btus per year. (Round to one decimal place.) Determine Avis if the Btu requirement varies over 30% of the breakeven amount. (Round to the nearest hundreds.) Annual Worth, $ % Change in Breakeven Number of Bturs Oil Gas 10 20 30 Enter your answer in each of the answer boxes. Save for Later An office building is considering converting from a coal-burning furnace to one that burns either fuel oil or natural gas. The cost of converting to fuel oil is estimated to be $85,000 initially; annual operating expenses are estimated to be $4,000 less additionally, annual operating and maintenance expenses are estimated to be $6,000 less than that for the coal-burning furnace. Approximately 1,000 Btus are produced per cubic foot of natural gas it is estimated that natural gas will cost $0.05 per cubic foot. A planning horizon of 22 years is to be used. Zero market values and a MARR of 9% per year are appropriate. Perform a sensitivity analysis for the annual Btu requirement for the heating system. (Hint First calculate the breakeven number of Btus (in thousands). Then determine AWS if Btu requirement varies over 30% of the breakeven amount.) Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year The breakeven number of Btus is million Btus per year. (Round to one decimal place.) Determine Avis if the Btu requirement varies over 30% of the breakeven amount. (Round to the nearest hundreds.) Annual Worth, $ % Change in Breakeven Number of Bturs Oil Gas 10 20 30 Enter your answer in each of the answer boxes. Save for Later
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