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Dana Hall wants to make sure that all options are being considered. In addition to the option of purchasing the Coldline brand refrigerators ( $

Dana Hall wants to make sure that all options are being considered. In addition to the option of purchasing the Coldline brand refrigerators ($10,000 cost per unit, $100,000 installation costs, $200,000 annual savings for five years), the 99s are also considering some less-expensive models. Westlake brand refrigerators will cost only $6,000 each, and have the same total installation will cost ($100,000) to install all 60 new units. These refrigerators will have a useful life of only four years and will produce net cost savings of only $100,000 per year because they are not as energy- efficient. A friend who also works in the restaurant industry has told Dana that the Arctic Air units are terrific. Danas research shows that a comparable Arctic Air unit will cost $11,500 per unit, with total installation costs of $120,000, and these refrigerators will last for 7 years; annual cost savings are estimated to be $175,000. Based on an analysis of his companys financial position and goals, Dana has set the discount rate at 8.0% percent. Some of the stakeholders for the refrigeration project are not very good at understanding the time value of money, so calculate a basic Benefit-Cost Ratio for each of the projects outlined in the preceding question.

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