The first alternative is to replace the centrifugal (chiller) of 50 tons, handlers and its system of insulation system. The initial costs are as follows:

Unit Cost Useful life

Centrifugal 50 tons $30,000 12 years

Airside. $45,000. 30 years

Materials. $2,000. n/a

Insulation system. $20,000. n/a

Concept of installation work *$1,200. n/a

* Is reduced to 40% of the original cost in the event of replacing equipment. The maintenance of the centrifuge is in

Maintenance Staff Duration of Monthly salary Cost

work. requirements. work.

Cleaning every 1 Assistant. $1,515

6months 1 technician. 1 day. $1,550

Annual maintenance 1technican. $1,550

of water pump. 1Assistant. 1/2 day. $1,515

Annual visit of

the manufacturing. $1,000

Replacement fans 1 technian $1,550

every three years. 1 Assistant. 1hour. $1,515. $150

Maintenance is performed by personnel from the workshop of cooling assigned to the Department of buildings and grounds of the land. Total hours working a regular employee in the enclosure is 1,950 hours per year, at a rate of 7.5 hours a day. (They must calculate the cost associated with maintenance of these teams in particular).

The additional costs associated with the operation of the centrifuge are as follows:

Item cost. Frequency. Cost

Insulation of cold water

pipe replacement. Every 5 years. $20,000

Acoustic cartons replacement *Annual. $9,500

* Are incurred this cost because there is a maintenance program for the insulation system. Costs associated with electric centrifugal system consumption are as follows:

The cost of daily electricity consumption of a centrifuge of 50 tonnes is $123 per day.

The cost of power consumption of the Manager is $22 per day. Centrifugal system operates continuously. The second alternative involves the installation of a system of individual units which consists of four capacitors and 41 consoles.

The initial costs are as follows:

Item cost. Unit cost. Units. Total cost. Useful life

Condenser MDV 400. $8,450. 2. 6 years

Condenser MDV 450. $9,400. 2. 6 years

Consoles 12,000 BTU. $650. 31. 6 years

Consoles 19,000 BTU. $865. 10. 6 years

Materials *. $32,000. n/a

Concept of installation work *. $16,000. n/a

It includes materials for the insulation system. The replacement work is reduced to 80% of the original cost.

The maintenance of the system is in

Maintenance Staff Units. Duration Monthly. Parts cost to

Work Requirements. Of work. salary. replace

Console cleaning 1technician. $1,550

and replacing 1Assistan 41. 1.5hours $1,515. $30/units

filters once a year.

Condenser cleaning 1technician. $1,550

once a year. 1 Assistant. 4. 1 hour. $1,515

Replacement pump 1technician. $1,550

consoles, every 3 yrs 1Assistant 41. day. $1,515. $50/unit

Maintenance is performed by personnel from the workshop of cooling assigned to the Department of buildings and grounds of the land. Total hours working a regular employee in the enclosure is 1,950 hours per year, at a rate of 7.5 hours a day. (They must calculate the cost associated with maintenance of these teams in particular).

The additional costs associated with the operation of the system of consoles are as follows

Item cost. Frequency. Cost

Replacement of refrigerant

piping insulation. Every 12 years. $10,000

Acoustic cartons

replacement *. Every 3 years. $9,500

This cost is incurred because there is a maintenance program for the insulation system. The costs associated with the electricity system consoles are as follows:

The full power of consoles system cost is $151.30 daily, at a rate of 12 hours a day. Assume that the system will operate for 260 working days annually.

1. do a present value analysis to select the best alternative

a. consider that the replacements will be identical units

b. the residual value of the equipment corresponds to the cost of the unit arrangement

c. analyze a 30 year horizon

d. consider a rate of interest of 6%

The use of EXCEL is recommended to facilitate computations.

2. Perform a sensitivity analysis, keeping the parameters of the centrifuge system constant, and changing the life of the console system from 5 years to a maximum of 10 years. 3. Perform a What if analysis for the centrifuge system, changing the life of the centrifuge to 10 years and the drivers to 25 years.

4. Consider that the equipment will be purchased by a manufacturing industry.

a. Determine the internal rate of return at which both alternatives are equally attractive. b. Assume that the previously discussed console system will be used to provide air conditioning in a manufacturing industry. It will be installed in a certain production area that generates an annual gross income of $ 450,000. The operating costs are $ 125,000 per year. Depreciate the console system, in operational condition, using the Modified Accelerated Capital Recovery System and determine the after-tax cash flow. Calculate the internal rate of return before and after taxes. Perform the analysis only for the first time the equipment is installed (First cycle, depending on the life of the consoles) c. Assume that the average inflation rate is 1.5% per year and benefits increase at the same rate. Recalculate the internal rate of return.