The initial costs are as follows: Unit Cost Lifetime 50 ton centrifuge $ 33,000 12 years Managers $ 47,000 30 years Labor for installation concept * $ 1,400 n / a Materials for initial installation ** $ 2,500 n / a Insulation system $ 22,000 n / a * Reduced to 40% of the original cost in case of equipment replacement. ** The cost of replacement materials is also assumed 40% of the original cost. The maintenance of the centrifuge consists of Maintenance work Personnel requirements Duration of work Monthly salary Cost Cleaning every 6 months 1 technician 1 helper 1 day $ 1,550 $ 1,515 Annual water pump maintenance 1 technician 1 helper 1/2 day $ 1,550 $ 1,515 Annual visit of the manufacturer $ 1,000 Fan replacement every three years 1 technician 1 assistant 1 hour $ 1,550 $ 1,515 $ 150 The maintenance is carried out by personnel of the Refrigeration Workshop assigned to the Department of Buildings and Land. The total number of hours a regular employee works in the Campus is 1,950 hours per year, at a rate of 7.5 hours per day. (They must calculate the cost associated with the time that personnel spend on the maintenance of this particular equipment.)

The additional costs associated with the operation of the centrifuge are the following Cost item Frequency Cost Cold water pipe insulation replacement Every 6 years $ 22,000 The costs associated with the electrical consumption of the centrifuge system are the following:  The cost for daily electricity consumption of a 50 ton centrifuge is $ 150 per day.  The cost of the power consumption of the driver is $ 25 per day. The centrifuge system operates continuously. The second alternative is the installation of a system of individual units consisting of four capacitors and 41 consoles. The initial costs are as follows: Cost item Unit cost Units Total cost Lifetime MDV condenser 400 $ 9,000 2 6 years MDV condenser 450 $ 9,700 2 6 years Consoles 12,000 BTU $ 700 31 6 years Consoles 19,000 BTU $ 900 10 6 years Materials *** $ 35,000 n / a Labor for installation concept **** $ 18,000 n / a *** Includes materials for the insulation system. The cost of materials for the replacement of the consoles is obvious. **** Replacement work is reduced to 80% of the original cost. System maintenance consists of Maintenance work Personnel requirements Units Duration of work Monthly salary Cost of parts to replace Console cleaning and filter replacement once a year 1 technician 1 assistant 41 1.5 hours $ 1,550 $ 1,515 $ 30 / unit Condenser cleaning once a year 1 technician 1 assistant 4 1 hour $ 1,550 $ 1,515 Replacement pump extraction of consoles, every 3 years 1 technician 1 assistant 41  day 1 technician 1 assistant $ 50 / unit The maintenance is carried out by personnel of the Refrigeration Workshop assigned to the Department of Buildings and Land. The total number of hours a regular employee works in the Campus is 1,950 hours per year, at a rate of 7.5 hours per day. (They must calculate the cost associated with the time that personnel spend on the maintenance of this particular equipment.) The additional costs associated with the operation of the console system are as follows Cost item Frequency Cost Coolant pipe insulation replacement Every 12 years $ 12,000 

The costs associated with the electrical consumption of the console system are the following:  The cost per concept of electricity consumption of the complete console system is $ 175 per day, at a rate of 12 hours per day. Presume that the system will operate for 260 business days annually.

Consider that the equipment will be acquired by a manufacturing industry. to. Determine the internal rate of return at which both alternatives are equally attractive. b. Assume that the previously analyzed console system will be used to provide air conditioning in a manufacturing industry that generates a taxable income of $ 3,000,000 to $ 5,000,000 annually. It will be installed in a certain production area that generates an annual gross income of $ 450,000. The operating costs are $ 125,000 annually. Price the console system, in an operational state, using the Accelerated Modified Capital Recovery System and determine the cash flow after taxes. Calculate the internal rate of return before and after taxes. Perform the analysis only for the first time the equipment is installed (First cycle, according to life c. Assume that the average inflation rate is 1.5% per year and the benefits increase at the same rate. Recalculate the internal rate of return.