Geothermal energy is a renewable, sustainable energy resource. Geothermal systems are available for a wide variety of applications. Mr. Naz Metz must replace his current system and is considering several options to make it more energy efficient. His current energy bill for heating and cooling is approximately $5,500 per year. Replacing his current system with a traditional heating and air conditioning split system (HVAC system) costs about $9,000. This replacement system would reduce his annual energy bill by approximately 20% due to increased efficiency of the condenser. As an alternative, Mr. Metz could install a residential geothermal system. This system would cost approximately $20,500 but promises to reduce his annual energy cost to 45% of its current level. The life expectancy of either system is 10 years with neither system having a salvage value at that time. Mr. Metz's personal MARR is 5.5% per year.

Based on an annual worth comparison of alternatives, which system is preferred?

The annnual worth of HVAC system is $______________

The annnual worth of geothermal system is $________________

Carry all interim calculations to 5 decimal places and then round your final answers to 2 decimal places. The tolerance is 0.20.

L3 Geothermal systemHVAC system is preferred.