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QUESTION 3 Your dad made the following estimates as he considered upgrading the air-conditioning system in their home. Use AW analysis to determine the sensitivity

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QUESTION 3 Your dad made the following estimates as he considered upgrading the air-conditioning system in their home. Use AW analysis to determine the sensitivity of the economic decision to interest rates of 4%, 6%, and 8% per year. Is the decision sensitive to a change in interest rates within this range? System 1 2 -10,000 -17,000 -600 -150 First cost, $ Annual operating cost, $ Salvage (disposal) value, $ New compressor and motor cost at midlife, $ -100 -300 -1,750 -3,000 Life, years 8 12 O Yes O No

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