Annual Cost Assignment
A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,102.00 to install, $5,077.00 to operate per year for 7 years at which time it will be sold for $6,948.00. The second, RayCool 8, costs $41,817.00 to install, $2,154.00 to operate per year for 5 years at which time it will be sold for $9,080.00. The firm’s cost of capital is 6.04%. What is the equivalent annual cost of the AC360? Assume that there are no taxes.
Answer format: Currency: Round to: 2 decimal places.
Derek will deposit $2,471.00 per year into an account starting today and ending in year 18.00. The account that earns 12.00%. How much will be in the account 18.0 years from today?
Answer format: Currency: Round to: 2 decimal places.
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