Question
The city administration is considering refurbishing the lighting system of its administration building. After an initial investigation, the city procurement office has narrowed down the
The city administration is considering refurbishing the lighting system of its administration building. After an initial investigation, the city procurement office has narrowed down the choices to the following two options:
Option 1 is an Ergolight system that costs $500,000 to purchase and install. The energy cost for option 1 is $20,000, and its maintenance cost is $2,000.
Option 2 is a conventional system that costs $100,000 to purchase and install. The energy cost for option 2 is $50,000, and its maintenance cost is $10,000. Both systems are expected to last for 20 years. Assume that the discount rate is 4% and all future costs are paid at the end of the year.
Please show me how to break it down in excel annually to find the cost for each system in constant dollars as well as find annually find the present value of energy and maintenance cost. Please list the formulas you used in excel. HINT the basis of this question has already been answered two other times on Chegg. I am just trying to figure out the annual breakdown instead of the total life time expency.
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