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In energy efficiency and auditing, solve the following: Craft Precision, Incorporated must repair their main air conditioning system, and they are considering two alternatives. 1)
In energy efficiency and auditing, solve the following:
Craft Precision, Incorporated must repair their main air conditioning system, and they are considering two alternatives. 1) purchase a new compressor for $20,000 that will have a future salvage value of $2000 at the end of its 15 -year life; or 2) purchase two high efficiency heat pumps for $28,000 that will have a future salvage value of $3000 at the end of their 15-year useful life. The new compressor will save the company $6500 per year in electricity costs, and the heat pumps will save $8500 per year. The company's discount rate is 12%. Using the BCR measure, which project should the company select? Is the answer the same if Life Cycle Costs are used to compare the projectsStep by Step Solution
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