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Homework answers / question archive / Question Completion Status CASE STUDY ANNUAL WORTH ANALYSIS -- THEN AND NOW Background and information Mohamad, owner of an residential furnished apartments in Dubai, performed an economic analysis 3 years ago when he decided to place an new efficient central AC unit for each apartments instead of old split units windows type in each room

Question Completion Status CASE STUDY ANNUAL WORTH ANALYSIS -- THEN AND NOW Background and information Mohamad, owner of an residential furnished apartments in Dubai, performed an economic analysis 3 years ago when he decided to place an new efficient central AC unit for each apartments instead of old split units windows type in each room

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Question Completion Status CASE STUDY ANNUAL WORTH ANALYSIS -- THEN AND NOW Background and information Mohamad, owner of an residential furnished apartments in Dubai, performed an economic analysis 3 years ago when he decided to place an new efficient central AC unit for each apartments instead of old split units windows type in each room. The estimates used and the annual worth analysis at MARR = 15$ are summarired below. Two different AC brands were compared York LG Cost and installations -26,000 -36,000 Annual maintenance cost, $ per year-200-300 Salvage values 2,000 3,000 Electrical power savings, 5 per year 25,000 35,000 Useful life, years 10 The spreadsheet in below sheet is the one Mohamad used to make the decision. York was the clear choice due to its substantially larger AW value, hence York AC units were installed MARR 15W Years LG Investment Annual and salvage maintenance 01 526.000 50 1150 5800 2150 5800 350 5800 450 5800 5150 5800 650 SHOO 7152.000 5800 8 Repair Investment savings and salvage 50 536.000 525.000 50 525.000 50 525.000 50 335.000 525.000 50 525.000 525.000 50 SO $3.000 $25.000 57.025 $16.131.35 Mark Annual Repair maintenance Savings 50 30 5300 535.000 5300 $35.000 5300 $35.000 $300 $35.000 $35.000 5300 $35.000 5300 $35.000 5300 $35.000 $300 $35.000 $35.000 -5300 $35.000 527,674 68 $300 9 10 AW element 56,068 Total AW 5800 10 AW element $6,068 Total AW $300 $300 $800 $3,000 $25,000 $7,025 $18,131.35 $35,000 $35,000 $27,674.68 During a quick review (year 3 of operation, it was obvious that the maintenance costs and repair savings have not followed (and will not follow the estimates made 3 years ago. In fact, the maintenance contract cost is going from $300 this year (year 3) to $1200 per year next year and will then increase 13% per year for the next 7 years. Also, the electrical power savings for the last 3 years were $31.312 year 1), 527,565 (year 2), and $30,493 year3), as best as Mohamad can determine. He believes savings will decrease by $2,199 per year hereafter. Finally, these 3 year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000. Q1. With these new estimates, What is the AW of the Investment and Salvage value for YORK AC unit? Q2 - With these new estimates, What is the FW of the Investment and Salvage value for YORK AC unit? 03. With these new estimates, what is the recalculated Aw maintenance cost for the YORK AC units? Q4 - With these new estimates, what is the recalculated PW maintenance cost for the YORK AC units? 05. With these new estimates, what is the recalculated Total Aw cost for YORK AC units. Q6. With these new estimates, what is the recalculated Total FW cost for YORK AC units. 27- With these new estimates, what is the recalculated Total PW cost for YORK AC units. 08 - If these estimates had been made 3 years ago, would YORK still have been the economic choice, why explain your answer 09. What is difference in capital recovery amount for the YORK units with these new estimates? Q10 - If MARR is changed to 10% for the upcoming 7 years what will be the Total PW for the YORK units? Save All Ans

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