Please follow general instructions and answer what is in yellow

General instructions 1. It is recommended to use EXCEL to facilitate computations. You will need to display the computations (in Excel or by hand, if you decide not to use the Excel functions). 2. If you make use of Excel, the file must be sent in original format. PDF documents or documents with cells with frozen results (No Paste Values) will not be accepted. Result cells should illustrate the functions used and reference cells, as applicable. The teachers' office area in the Antonio Lucchetti building has issues associated with the air conditioning system. Currently the existing system is centrifugal. The Department of Buildings and Land is evaluating two alternatives to address the situation. The first alternative is to replace the 50 tons centrifuge (chiller), the handle system and its isolation system. The upfront costs are as follows: Unit Cost Life Centrifuge 50 tons $33,000 1 Handlers $47,000 Installation work $1,400 n/a Materials for initial installation ** $2,500 n/a Islation system $22,000 n/a *Reduces to 40% of original cost in case of equipment replacement. ** The cost of replacement materials is also assumed 40% of the original cost. Centrifugal maintenance consists of 15 years 30 years Maintenance work Staff requirements Cost Duration of work 1 day Cleaning every 6 months Monthly salary $1,550 $1,515 $1,550 $1.515 1 technician 1 helper 1 technician 1 helper Annual water pump maintenance 1/2 day The additional costs associated with the centrifuge operation are as follows Cost item Cold water pipe insulation replacement Frequency Every 6 years Cost $22,000 The costs associated with power consumption to the centrifuge system are as follows: The cost of daily electricity consumption of a 50-ton centrifuge is $150 per day. The cost of power consumption of the handler is $25 per day. The centrifuge system operates continuously. The second alternative is the installation of a system of individual units consisting of four capacitors and 41 consoles. The upfront costs are as follows: Total cost Units 2 Cost item MDV 400 capacitor MDV 450 capacitor Consoles 12,000 BTU Consoles 19,000 BTU Materials Unit cost $9,000 $9,700 $700 $900 2 Life 6 years old 6 years old 6 years old 6 years old n/a 31 10 S35,000 The second alternative is the installation of a system of individual units consisting of four capacitors and 41 consoles. The upfront costs are as follows: Cost item Unit cost Units Total cost Life MDV 400 capacitor $9,000 2 6 years old MDV 450 capacitor $9,700 6 years old Consoles 12,000 BTU $700 31 years old Consoles 19,000 BTU $900 10 years old Materials $35,000 n/a Installation work*** $18,000 n/a Includes materials for the is relaxation system. The cost of materials for replacing console ignored. Replacement work is reduced to 80% of the original cost, 2 System maintenance consists of Maintenance work Units Duration of work 1.5 hours Cost parts to replace $30/unit 41 Staff requirements 1 technician 1 helper 1 technician 1 helper 1 technician 1 helper 4 Console cleaning and filter replacement once a year Condenser cleaning once a year Replacement console extraction pump, every 3 years 1 hour Monthly salary $1,550 $1,515 $1,550 $1,515 1 technician 1 helper 41 1/4 day $50/unit Maintenance is carried out by staff of the Refrigeration Workshop attachedto the Department of Buildings and Land of the land. The total hours a regular employee works at the Campus is 1,950 hours per year, at a rate of 7.5 hours per day. (You must calculate the cost associated with the time staff spend on the maintenance tasks of these particular equipment.) The additional costs associated with operating the console system are as follows Cost item Frequency Cost Refrigerant pipe insulation Every12 years $12,000 replacement The costs associated with the power consumption of the console system are as follows: The cost of full console system power consumption is$17s per day at a rate of 12 hours per day, It assumes that the system will operate for 260 working days antally 1. Perform a present value analysis to select the best alternative a. Consider that replacements will be for identical units b. The residual value of the equipment corresponds to the cost of disposition of the unit c. Analyze a 30-year horizon d. Consider an interest rate of 6% 2. Perform a sensitivity analysis, keeping centrifugal system parameters constant, and changing the console system life from 5 years to a maximum of 10 years. 3. Consider that the equipment will be purchased by a manufacturing industry. a. Determine the internal rate of return at which both alternatives are equally attractive. B. Assume that the console system previously analyzed will be used to provide air conditioning in a manufacturing industry that generates a taxable income of $3,000,000 to $5,000,000 per year. It will be installed in a certain production area that generates an income of$450,000 gross annually. Operating costs are $125,000 per year. Depreciate the console system, in an operational state, using the Modified AcelerCapital Recovery Finger System and determine the cash flow aftertax. Calculate the internal rate of return before and after tax. Perform the scan only for the first time the computer is installed (First cycle, depending on the life General instructions 1. It is recommended to use EXCEL to facilitate computations. You will need to display the computations (in Excel or by hand, if you decide not to use the Excel functions). 2. If you make use of Excel, the file must be sent in original format. PDF documents or documents with cells with frozen results (No Paste Values) will not be accepted. Result cells should illustrate the functions used and reference cells, as applicable. The teachers' office area in the Antonio Lucchetti building has issues associated with the air conditioning system. Currently the existing system is centrifugal. The Department of Buildings and Land is evaluating two alternatives to address the situation. The first alternative is to replace the 50 tons centrifuge (chiller), the handle system and its isolation system. The upfront costs are as follows: Unit Cost Life Centrifuge 50 tons $33,000 1 Handlers $47,000 Installation work $1,400 n/a Materials for initial installation ** $2,500 n/a Islation system $22,000 n/a *Reduces to 40% of original cost in case of equipment replacement. ** The cost of replacement materials is also assumed 40% of the original cost. Centrifugal maintenance consists of 15 years 30 years Maintenance work Staff requirements Cost Duration of work 1 day Cleaning every 6 months Monthly salary $1,550 $1,515 $1,550 $1.515 1 technician 1 helper 1 technician 1 helper Annual water pump maintenance 1/2 day The additional costs associated with the centrifuge operation are as follows Cost item Cold water pipe insulation replacement Frequency Every 6 years Cost $22,000 The costs associated with power consumption to the centrifuge system are as follows: The cost of daily electricity consumption of a 50-ton centrifuge is $150 per day. The cost of power consumption of the handler is $25 per day. The centrifuge system operates continuously. The second alternative is the installation of a system of individual units consisting of four capacitors and 41 consoles. The upfront costs are as follows: Total cost Units 2 Cost item MDV 400 capacitor MDV 450 capacitor Consoles 12,000 BTU Consoles 19,000 BTU Materials Unit cost $9,000 $9,700 $700 $900 2 Life 6 years old 6 years old 6 years old 6 years old n/a 31 10 S35,000 The second alternative is the installation of a system of individual units consisting of four capacitors and 41 consoles. The upfront costs are as follows: Cost item Unit cost Units Total cost Life MDV 400 capacitor $9,000 2 6 years old MDV 450 capacitor $9,700 6 years old Consoles 12,000 BTU $700 31 years old Consoles 19,000 BTU $900 10 years old Materials $35,000 n/a Installation work*** $18,000 n/a Includes materials for the is relaxation system. The cost of materials for replacing console ignored. Replacement work is reduced to 80% of the original cost, 2 System maintenance consists of Maintenance work Units Duration of work 1.5 hours Cost parts to replace $30/unit 41 Staff requirements 1 technician 1 helper 1 technician 1 helper 1 technician 1 helper 4 Console cleaning and filter replacement once a year Condenser cleaning once a year Replacement console extraction pump, every 3 years 1 hour Monthly salary $1,550 $1,515 $1,550 $1,515 1 technician 1 helper 41 1/4 day $50/unit Maintenance is carried out by staff of the Refrigeration Workshop attachedto the Department of Buildings and Land of the land. The total hours a regular employee works at the Campus is 1,950 hours per year, at a rate of 7.5 hours per day. (You must calculate the cost associated with the time staff spend on the maintenance tasks of these particular equipment.) The additional costs associated with operating the console system are as follows Cost item Frequency Cost Refrigerant pipe insulation Every12 years $12,000 replacement The costs associated with the power consumption of the console system are as follows: The cost of full console system power consumption is$17s per day at a rate of 12 hours per day, It assumes that the system will operate for 260 working days antally 1. Perform a present value analysis to select the best alternative a. Consider that replacements will be for identical units b. The residual value of the equipment corresponds to the cost of disposition of the unit c. Analyze a 30-year horizon d. Consider an interest rate of 6% 2. Perform a sensitivity analysis, keeping centrifugal system parameters constant, and changing the console system life from 5 years to a maximum of 10 years. 3. Consider that the equipment will be purchased by a manufacturing industry. a. Determine the internal rate of return at which both alternatives are equally attractive. B. Assume that the console system previously analyzed will be used to provide air conditioning in a manufacturing industry that generates a taxable income of $3,000,000 to $5,000,000 per year. It will be installed in a certain production area that generates an income of$450,000 gross annually. Operating costs are $125,000 per year. Depreciate the console system, in an operational state, using the Modified AcelerCapital Recovery Finger System and determine the cash flow aftertax. Calculate the internal rate of return before and after tax. Perform the scan only for the first time the computer is installed (First cycle, depending on the life