Question No. 1(20 points) 1. Craft precision, Incorporated in Sharjah must repair their main air compressor air conditioning system, and they are considering two alternatives (1) purchase a new compressor for $20, 000 that will have a future salvage value (2) purchase two high efficieney heat pumps for $28,000 that will have a futue as follows: of $2000 at the end of its 15 year life; or salvage value of S3000 at the end of their 15 year useful life. The new compressor will save the company $6500 per year in electricity costs, and the heat pumps will save S8500 per year. The company's discount rate is 12%. Using the BCR measure, which project should the company select? Is the answer the same if Life Cycle Costs are used to compare the projects? Explain in details your learning points from this project. Solution