Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central AC unit for each apartments instead of old split units windows type in each room The estimates used and the annual worth analysis at MARR 12 are summarized below Two different AC brands were compared LG York Cost and installation, $ 26,000 36,000 Annual maintenance cost, $ per year 800 300 Salvage value, $ 2,000 3,000 Electrical power savings, $ per year 25,000 35,000 Useful life, years 7 10 The spreadsheet in below sheet is the one Mohamad used to make the decision York was the clear choice due to its substantially larger AW value, hence York AC units were installed MARR 12 LG York Investment Annual Repair Investment Annual Repair Years and salvage maintenance savings and salvage maintenance savings 0 $26,000 $0 $0 $36,000 $0 $0 1 $0 $800 $25,000 $0 $300 $35,000 2 $0 $800 $25,000 $0 $300 $35,000 3 $0 $800 $25,000 $0 $300 $35,000 4 $0 $800 $25,000 $0 $300 $35,000 5 $0 $800 $25,000 $0 $300 $35,000 6 $0 $800 $25,000 $0 $300 $35,000 7 $2,000 $800 $25,000 $0 $300 $35,000 8 $0 $300 $35,000 9 $0 $300 $35,000 10 $3,000 $300 $35,000 AW element $5,499 $800 $25,000 $7,025 $300 $35,000 Total AW $18,701 17 $28,499 52 During a quick review (year 4 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the estimates made 4 years ago In fact, the maintenance contract cost is going from $300 this year (year 4) to $1200 per year next year and will then increase 7 per year for the next 6 years Also, the electrical power savings for the last 4 years were $31,312 ( year 1) , $27,565 ( year 2), $30,493( year3), and $32,903( year4), as best as Mohamad can determine He believes savings will decrease by $3,349 per year hereafter Finally, these 4 year old AC units are worth nothing on the market now, so the salvage is zero, not $3000 Q5 With these new estimates, what is the recalculated Total AW for YORK AC units Q6 With these new estimates, what is the recalculated Total FW for YORK AC units

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Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central

Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central AC unit for each apartments instead of old split units windows type in each room. The estimates used and the annual worth analysis at MARR = 12% are summarized below. Two different AC brands were compared.

	LG	York
Cost and installation, $	26,000	36,000
Annual maintenance cost, $ per year	800	300
Salvage value, $	2,000	3,000
Electrical power savings, $ per year	25,000	35,000
Useful life, years	7	10

The spreadsheet in below sheet is the one Mohamad used to make the decision. York was the clear choice due to its substantially larger AW value, hence York AC units were installed.

MARR	12%

		LG			York
	Investment	Annual	Repair	Investment	Annual	Repair
Years	and salvage	maintenance	savings	and salvage	maintenance	savings
0	-$26,000	$0	$0	-$36,000	$0	$0
1	$0	-$800	$25,000	$0	-$300	$35,000
2	$0	-$800	$25,000	$0	-$300	$35,000
3	$0	-$800	$25,000	$0	-$300	$35,000
4	$0	-$800	$25,000	$0	-$300	$35,000
5	$0	-$800	$25,000	$0	-$300	$35,000
6	$0	-$800	$25,000	$0	-$300	$35,000
7	$2,000	-$800	$25,000	$0	-$300	$35,000
8				$0	-$300	$35,000
9				$0	-$300	$35,000
10				$3,000	-$300	$35,000
AW element	-$5,499	-$800	$25,000	-$7,025	-$300	$35,000
Total AW			$18,701.17			$28,499.52

During a quick review (year 4 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the estimates made 4 years ago. In fact, the maintenance contract cost is going from $300 this year (year 4) to $1200 per year next year and will then increase 7% per year for the next 6 years. Also, the electrical power savings for the last 4 years were $31,312 ( year 1) , $27,565 ( year 2), $30,493( year3), and $32,903( year4), as best as Mohamad can determine. He believes savings will decrease by $3,349 per year hereafter. Finally, these 4-year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000.

Q5 - With these new estimates, what is the recalculated Total AW for YORK AC units.

Q6 - With these new estimates, what is the recalculated Total FW for YORK AC units.