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Your company is environmentally conscious and is considering two heating options for a new research building. What you know about each option is below, and
Your company is environmentally conscious and is considering two heating options for a new research building. What you know about each option is below, and your company will use an annual interest rate (MARR) of 9% for this decision. Which is the lower cost option for the company? Click the icon to view the additional information about the options. - Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR IS 9% per year The PW of the Gas Heating Option is $ (Round to the nearest dollar.) The PW of the Geothermal Heating Option is s (Round to the nearest dollar.) The lower cost alternative is the (1) - option. 1: More Info Gas Heating Option: The initial equipment and installment of the natural gas system would cost $240,000 maintenance costs of the equipment are expected to be $2,000 per year, starting next year, for each of the next 20 years. The energy cost is expected to be $7,000 starting next year and is expected to rise by 6% per year for each of the next 20 years due to the price of natural gas increasing Geothermal Heating Option: Because of green energy incentives provided by the government, the geothermal equipment and installation are expected to cost only $200,000 right now, which is cheaper than the gas lines. There would be no energy cost with geothermal, but because this is a relatively newer technology the maintenance is expected to be $11,000 per year, staring next year, for each of the next 20 years
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