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PS:33 A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,677.00
PS:33 A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,677.00 to install, $5,074.00 to operate per year for 7 years at which time it will be sold for $6,845.00. The second, RayCool 8, costs $41,995.00 to install, $2,069.00 to operate per year for 5 years at which time it will be sold for $8,902.00. The firms cost of capital is 5.59%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes.
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