Determine the interest rate in which both alternatives are equally attractive

(Place your order and get a customized paper on this topic just for you)

A building has problems associated with the air conditioner. The actual system is centrifuge (chille Show more A building has problems associated with the air conditioner. The actual system is centrifuge (chiller). Two alternatives are being evaluated to attend the situation. The first alternative consists on replacing the centrifuge (chiller) of 50 tons the handler system and the insulation system. The initial costs are: Unit Cost Lifespan Centrifuge (chiller) 50 tons $30000 12 years Handlers $45000 30 years Materials $2000 n/a Insulation System $20000 n/a Installation work* $1200 n/a *It reduces to 60% in case of equipment replacement. The maintenance of the centrifuge (chiller) consist on: Maintenance labor Personnel required Labor duration Monthly salary Cost Cleaning every 6 months 1 tecnician 1 assistant 1 day $1550 $1515 Anual maintenance of water pump 1 tecnician 1 assistant 1/2 day $1550 $1515 Anual visit of manufacturer $1000 Fan replacements every 3 years 1 tecnician 1 assistant 1 hour $1550 $1515 $150 Total hours of an employee are 1920 hours per year at a rate of 7.5 hours daily. Additional costs associated with the operation of the centrifuge (chiller) Part of cost Frequency Cost Replacement of cold water pipe insulation Every 5 years $20000 Replacement of acoustic boards** anual $9500 ** This cost is necessary because there is no maintenance program for the insulation system The costs associated with the power consumption of the centrifuge (chiller) and handler are: The cost of daily power consumption of a 50 ton centrifuge (chiller) is $123 daily The cost of daily power consumption of the handler is $22 daily The centrifuge (chiller) system operates continuously. The second alternative consists on the installation of a system of individual units consisting of 4 condensers and 41 consoles. The initial costs are: Part of cost Cost per unit Units Total cost lifespan MDV 400 condenser $8450 2 7 aos MDV 450 condenser $9400 2 7 aos 12000 BTU consoles $650 31 7 aos 19000 BTU consoles $865 10 7 aos Materials*** $32000 n/a Installation work**** $16000 n/a *** Includes materials for the insulation system. **** It reduces to 20% in case of equipment replacement. The maintenance of the system consist of: Maintenance labor Personnel required Units Labor duration Monthly salary Cost of replacement parts Console cleaning and filter replacements every year (annually) 1 tecnician 1 assistant 41 1.5 hour $1550 $1515 $30/unit Condenser cleaning every year (annually) 1 tecnician 1 assistant 4 1 hour $1550 $1515 Replacement of extraction pump from the consoles every 3 years 1 tecnician 1 assistant 41 day $50/unit Total hours of an employee are 1920 hours per year at a rate of 7.5 hours daily. The additional costs associated with the operation of the console system are: Part of cost Frequency Cost Replacement of insulation pipe refrigerant Every 10 years $10000 Replacement of acoustic boards ***** Every 4 years $9500 ***** This cost is necessary because there is no maintenance program for the insulation system The costs associated with the power consumption of console system are: The cost of power consumption of the entire console system is $151.30 daily at a rate of 12 hours daily. Assume that the system will operate during 260 working days annually. 1. Consider that the equipment will be acquired by a manufacturing industry a. Determine the interest rate in which both alternatives are equally attractive. b. Assume that the equipment will be used to provide air conditioning to the areas of production that generates an income of $500000 annually. Depreciate the console system in operational state using the modified accelerated recovery system capital and determine the cash flow after tax Using EXCEL is recommended to facilitate the computations. Show less

Order a unique copy of this paper
(550 words)

Approximate price: $22

Place Order
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
× WhatsApp us for help