CASE STUDY 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. During a quick review (year 4 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the 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 7% 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( year3), and $32,903 ( year4), as best as Mohamad can determine. He believes savings will decrease by $3,349 per year hereafter. Finally, these 4year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000. 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? CASE STUDY 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. During a quick review (year 4 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the 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 7% 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( year3), and $32,903 ( year4), as best as Mohamad can determine. He believes savings will decrease by $3,349 per year hereafter. Finally, these 4year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000. 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