*** Use the formulas below. Do not use tables to solve.

A construction company is considering two different sets of low consumption fixtures for restrooms (including HET, HEU, etc.) to use in a residential renovation project. The main costs are shown below. Use present worth to decide which set of fixtures should be selected, at an interest rate of 5% per year, if:

a) We have to choose one of the two sets.

b) There is also another set of regular fixtures (not low-flow fixtures), and this option will have a present worth of -$200,000 over its 14-year life cycle (which takes into account the initial cost, O&M costs, and salvage value).

Set A		Set B
Initial cost, $	205,000		235,000
Operations and Maintenance cost, $/year	11,000		10,000
Water Savings, $/year	2,000		3,000
Salvage value, $	25,000		20,000
Life, years	10		12

i(1 i)