Question
guys please I don't want Excel solution I need the full answer with the formulas and the cash flow drawings please In a companys renovation
guys please I don't want Excel solution I need the full answer with the formulas and the cash flow drawings please
In a companys renovation of a small office building, two feasible alternatives for upgrading the heating, ventilation, and air conditioning (HVAC) system have been identified. Either Alternative A or Alternative B must be implemented. The costs are as follows:
Alternative A: Rebuild (overhaul) the existing HVAC Equipment,labor,and material store build.............$18,000 Annual cost of electricity..................................... $32,000 Annual maintenance expenses .............................$2400
Alternative B: Install a new HVAC system that utilizes existing ductwork Equipment, labor, and materials to install ............ $ 60,000 Annual cost of electricity........................................ $ 9000 Annual maintenance expenses ...............................$16,000 .Replacement of a major component at EOY (4).......$9400
At the end of eight years, the estimated market value for Alternative A is $2,000 and for Alternative B it is $8,000. Assume that both alternatives will provide comparable service (comfort) over an eight-year period, and assume that the major component replaced in Alternative B will have no market value at EOY eight.
(1) Draw net cash flow for each alternative.
(2) Use a cash-flow table and end-of-year convention to tabulate the net cash flows for both alternatives.
(3) Determine the annual net cash-flow difference between the alternatives (B A).
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