Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ANNUAL WORTH ANALYSIS-THEN AND NOW Background and Information Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when

image text in transcribed
image text in transcribed
ANNUAL WORTH ANALYSIS-THEN AND NOW Background and Information Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central AC unit for each apartments instead of old split units windows type in each room. The estimates used and the annual worth analysis at MARR =12% are summarized below. Two different AC brands were compared. The spreadsheet in below sheet is the one Mohamad used to make the decision. York was the clear choice due to its substantially larger AW value, hence York AC units were installed. During a quick review (year 4 of operation), I was obvious that the maintenance costs and repair savings have not followed (and will not follow) tho estimates made 4 years ago. In fact, the maintenance contract cost is going from $300 this year (year 4 ) to $1200 per year next year and will then increase 9% per year for the next 6 years. Also, the electrical power savings for the last 4 years were $31,312 (year 1 ). $27,565 (year 2), $30,493( year 3 ), and $32,903 ( year4), as best as Mohamad can determine. He believes savings will decrease by $1,500 per year hereafter. Finally, these 4-year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000. Q1 - With these new estimates, What is the AW of the Investment and Salvage value for YORK AC unit? Q2 - With these new estimates, What is the FW of the Investment and Salvage value for YORK AC unit? Q3 - With these new estimates, what is the recalculated AW maintenance cost for the YORK AC units? Q4 - With these new estimates, what is the recalculated PW maintenance cost for the YORK AC units? Q5- With these new estimates, what is the recalculated Total AW for YORK AC units: Q6 - With these new estimates, what is the recalculated Total FW for YORK AC units. Q7 - With these new estimates, what is the recalculated Total PW for YORK AC units. QB - If these estimates had been made 4 years ago, would YORK still have been the oconomic choice, why explain your answer Q9 - What is difference in capital recovery amount for the YORK units with these new estimates? Q10 - If MARR is changed to 8% for the upcoming 6 years what will be the Total PW for the YORK units

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing For Financial Advisors

Authors: Eric Bradlow, Keith Niedermeier, Patti Williams

1st Edition

0071605142, 978-0071605144

More Books

Students also viewed these Finance questions

Question

What detailed measures should be use? Plo8

Answered: 1 week ago

Question

The Functions of Language Problems with Language

Answered: 1 week ago

Question

The Nature of Language

Answered: 1 week ago