Please help. Thanks
6-38. Two mutually exclusive alternatives for office building refrigeration and air conditioning are
being investigated. Their relevant costs and lives are summarized as follows:
Absorption Chilling (AC
Compression chilling(cc
Capital investment
$60,000
$80,000
Annual operating expenses
40,000
32,000
Salvage (market)value
10,000
0
Useful life
6 years
9 years
If the hurdle rate (MARR) is 15% per year and the study period is 18 years, which chilling system
should be recommended?6.5)