PLEASE USE EXCEL

A retrofitted space- heating system is being considered for a small office building. The system can be purchased and installed for $120,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a six year period. A kilowatt-hour of electricity costs $0.10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $8,000 at the end of six years, and additional annual operating and maintenance expenses are negligible. Use the benefit cost method to make a recommendation.

1. Have available the Microsoft Excel software program.

2. Construct a table in the Microsoft Excel work sheet as shown below. The instructions are shown in the second table.

3. The construction of the Microsoft Excel sheets and the answered questions has a total grading value of eight (8) points.

4. The deadline for hand in this exercise is indicated at the end of the week of the eleventh module.

Steps:

1. Start the Microsoft Excel software program.
2. Use the example data to complete the assignment.

Notes:

Enter the information exactly as below.

Questions (You only have to write in Excel one of the answers, the one you think is the correct answer to the question)

1. When the MARR is 15% and the life of the heating system asset is 6 years is the alternative acceptable?

1. True
2. False

2. When the MARR is changed from 15% and the life of the heating system asset is still 6 years is the alternative acceptable?

1. True
2. False

3. In this problem, if the salvage value is changed from $8,000 to $20,000 is the alternative acceptable?

1. Yes
2. No

4. In this problem if the life of the heating system asset is changed from 6 years to 10 years, the alternative is a good selection?

1. True
2. False

H. Annuity $120,000.00 (A/P, i, n) 0.264236907 31,708.43 30,000.00 Factor Investment = $30,000.00 0.15 $8,000.00 (A/F, i, n) 0.114236907 Save = 300000*0.10 MARR = 913.90 Market value = 6. n= 8. Benefit/ cost = 0.974199 9. 10 11 D. H. Factor Annuity =E3"G3 30,000.00 $120,000.00 (A/P, i, n) =(E5 (1+E5)^E7)/((1+E5)^E7-1) Investment = Save = 300000*0.10 =300000*0.1 MARR = 0.15 $8,000.00 (A/F,I,n) =E5/((1+E5)^E7-1) =E6*G6 6. Market value = Benefit/ cost = =H4/(H3-H6) 10 11 12 13 14 15 (do not forget to write the = sign) %3D