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Question: Your Company plans to purchase a 10-ton A/C to replace an existing unit. It costs $15,000 to install. It is high-efficiency equipment, which meets the requirement of SCE's rebate program of $50 per ton/year for the first two years. The expected yearly energy saving is $4,000 with 4% escalation rate. The estimated yearly repair/maintenance fee is $1,000 with 2% escalation rate; Assume 5% discount rate, please find out:

a) Simple Pay back

b) Life-Cycle cost by showing accumulative present values for the next 5 years.

c) Utility savings from the above unit will help to reduce pollutants liberated to the atmosphere. If current electric rate is $0.14/kwh, how many pounds of CO2 yearly will be reduced due to the electric savings from it? (Assume electric generated bygas)

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Category:- Basic Finance
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