Question
In: Finance
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,197.00 to install, $5,052.00 to operate per year for 7 years at which time it will be sold for $7,031.00. The second, RayCool 8, costs $41,616.00 to install, $2,035.00 to operate per year for 5 years at which time it will be sold for $8,941.00. The firm’s cost of capital is 6.43%. What is the equivalent annual cost of the AC360? Assume that there are no taxes.
Solutions
Expert Solution
Solution :
The equivalent annual cost of the AC360 = - $ 8,990.05
= - $ 8,990 ( When rounded off to the nearest whole number )
Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.
jeff jeffy answered 1 year agoRelated Solutions
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,454.00 to install, $5,152.00 to operate per year
for 7 years at which time it will be sold for $7,182.00. The
second, RayCool 8, costs $41,990.00 to install, $2,150.00 to
operate per year for 5 years at which time it will be sold for
$9,054.00. The firm’s cost of capital is 6.22%. What is the
equivalent annual...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,708.00 to install, $5,045.00 to operate per year
for 7 years at which time it will be sold for $7,180.00. The
second, RayCool 8, costs $41,711.00 to install, $2,042.00 to
operate per year for 5 years at which time it will be sold for
$9,069.00. The firm’s cost of capital is 5.34%. What is the
equivalent annual...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,774.00 to install, $5,198.00 to operate per year
for 7 years at which time it will be sold for $6,919.00. The
second, RayCool 8, costs $41,604.00 to install, $2,063.00 to
operate per year for 5 years at which time it will be sold for
$9,086.00. The firm’s cost of capital is 5.80%. What is the
equivalent annual...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering
replacing the existing industrial air conditioning unit. They will
pick one of two units. The first, the AC360, costs $26,468.00 to
install, $5,014.00 to operate per year for 7 years at which time it
will be sold for $7,062.00. The second, RayCool 8, costs $41,121.00
to install, $2,143.00 to operate per year for 5 years at which time
it will be sold for $9,074.00. The firm’s cost of capital is 5.40%.
What is the equivalent annual...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,930.00 to install, $5,106.00 to operate per year
for 7 years at which time it will be sold for $6,924.00. The
second, RayCool 8, costs $41,240.00 to install, $2,200.00 to
operate per year for 5 years at which time it will be sold for
$9,047.00. The firm’s cost of capital is 5.28%. What is the
equivalent annual...
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,225.00 to install, $5,116.00 to operate per year
for 7 years at which time it will be sold for $7,059.00. The
second, RayCool 8, costs $41,570.00 to install, $2,133.00 to
operate per year for 5 years at which time it will be sold for
$8,964.00. The firm’s cost of capital is 5.32%. What is the
equivalent annual...
1. A firm is considering replacing the existing industrial air conditioning unit. They will pick one...
1. A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,094.00 to install, $5,013.00 to operate per year
for 7 years at which time it will be sold for $7,062.00. The
second, RayCool 8, costs $41,265.00 to install, $2,091.00 to
operate per year for 5 years at which time it will be sold for
$8,963.00. The firm’s cost of capital is 6.87%. What is the
equivalent...
1.A firm is considering replacing the existing industrial air conditioning unit. They will pick one of...
1.A firm is considering replacing the existing industrial air
conditioning unit. They will pick one of two units. The first, the
AC360, costs $26,376.00 to install, $5,146.00 to operate per year
for 7 years at which time it will be sold for $7,155.00. The
second, RayCool 8, costs $41,333.00 to install, $2,023.00 to
operate per year for 5 years at which time it will be sold for
$8,968.00. The firm’s cost of capital is 6.46%. What is the
equivalent annual...
1. A) A firm is considering replacing the existing industrial air conditioning unit. They will pick...
1. A) A firm is considering replacing the existing industrial
air conditioning unit. They will pick one of two units. The first,
the AC360, costs $26,294.00 to install, $5,151.00 to operate per
year for 7 years at which time it will be sold for $6,930.00. The
second, RayCool 8, costs $41,464.00 to install, $2,183.00 to
operate per year for 5 years at which time it will be sold for
$8,907.00. The firm’s cost of capital is 5.33%. What is the...
B Company is considering replacing an existing processor with a new one that costs $240,000. Shipping...
B Company is considering replacing an existing processor with a
new one that costs $240,000. Shipping and setup costs for the new
processor are estimated.to be $13,000. B Company's working capital
is expected to increase by $15,000 when the new processor begins
operation and is expected to be fully recoverable at the end of the
project. The new processor's useful life is expected to be 5 years
and its salvage value at that point is estimated to be $49,900. The...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- java programing project Implement a program that computes the Fibonacci of a specified number, the factorial...
- Team Case #3: Rural Utility Your consulting team has been brought in by the Board chairperson...
- I have a question pertaining to ruby on rails. I was wondering if there is a...
- For the past two years, the United States has imposed tariffs (tax) on imports from China....
- Module 2 Course Work 1. Read Pages 12-30. 2. Use the week 1 video's and this...
- 6. Solve the following recurrence relations t(n) = t(n-1) + 3 for n>1 t(1) = 0...
- In C programming using C11 library, how can we validate command line arguments? meaning for example...
ADVERTISEMENT