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Here are three alternatives for the heating, ventilation, and air conditioning (HVAC) system for a hospital. Purchase & Installation Cost Annual Operating Expense Annual Maintenance

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Here are three alternatives for the heating, ventilation, and air conditioning (HVAC) system for a hospital. Purchase & Installation Cost Annual Operating Expense Annual Maintenance Expense Market (Salvage) Value Useful Life (years) Reamed Forty Below $2,000,000 $2,300,000 $ 80,000 $ 50,000 $ 12,000 $ 20,000 see table below 15 Trained $2,250,000 $ 70.000 $ 14,000 17 16 Which alternative do you recommend? With an incremental procedure (not necessarily IRR), evaluate these alternatives by using the coterminated life assumption. DO NOT assume repeatability. The MARR is 12% per year. State all other assumptions. The Market Value for each alternative at the end of years 14 through 18 is given in the table below. Market Value of Alternative HVAC Systems for EOY 14 - 18 Reamed Forty Below Trained Acme EOY 14 $100,000 $340,000 $235,000 $500,000 EOY 15 $ 50.000 $225,000 $100,000 $400,000 EOY 16 $110,000 $ 10.000 $300,000 EOY 17 $ 0 $200,000 EOY 18 $100.000

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