Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please solve the two questions with clear steps. I attached the correct answer but I want to know how to solve it. During a quick

please solve the two questions with clear steps. I attached the correct answer but I want to know how to solve it. image text in transcribed
image text in transcribed

During a quick review (year 4 of operation), it was obvious that the maintaince cost 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 9% 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 $1,500 per year hereafter. Finally, these 4-year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000.

1. What is difference in capital recovery amount for the YORK units with these new estimates?
2. If MARR is changed to 8% for the upcoming 6 years what will be the Total PW for the YORK units?
Correct answers:
1. -170.95
2. 174774.58
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. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen

6th Edition

ISBN: 0077185536, 978-0077185534

More Books

Students also viewed these Accounting questions

Question

=+Does it use eyecatching graphics?

Answered: 1 week ago