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please state the assumptions 1. Energy manager at the manufacturing facility is looking towards replacing aging low efficiency furnace unit that is used to heat
please state the assumptions
1. Energy manager at the manufacturing facility is looking towards replacing aging low efficiency furnace unit that is used to heat the production floor. Two alternatives are being considered: A. High-efficiency forced air natural gas furnace with a cost of $32,000 that will have a present value resale of $4,500 after 15 years, B. Standard-efficiency natural gas furnace for $23,000 that will have a salvage value of $3,000 at the end of its 15 year life. If the potential savings in terms of reduced natural gas bill for the facility are for option A): $9000 B): $7000 Find the best alternative using the lifecycle cost approach and the BCR (benefit-to-cost-ratio) method. Assume that facility uses a discount rate of 15%. Do they provide the same answer? Why? 1. Energy manager at the manufacturing facility is looking towards replacing aging low efficiency furnace unit that is used to heat the production floor. Two alternatives are being considered: A. High-efficiency forced air natural gas furnace with a cost of $32,000 that will have a present value resale of $4,500 after 15 years, B. Standard-efficiency natural gas furnace for $23,000 that will have a salvage value of $3,000 at the end of its 15 year life. If the potential savings in terms of reduced natural gas bill for the facility are for option A): $9000 B): $7000 Find the best alternative using the lifecycle cost approach and the BCR (benefit-to-cost-ratio) method. Assume that facility uses a discount rate of 15%. Do they provide the same answer? WhyStep by Step Solution
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