Two alternatives for the replacement of the climate, Ask an Expert

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Two alternatives for the replacement of the climate maintenance system in an office building are under consideration. The remaining life of the building is 25 years and the discount rate for the owners of the building is 10%. The costs for the two systems are given in the table below:

Heat Pump Air conditioner

Investment $500,000 $300,000

Energy cost per year $20,000 $30,000

Maintenance cost per year $10,000 $20,000

Determine the NPV and EAC for the two alternatives

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92309638

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