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:
Capital investment
Absorption Chilling (AC)
Compression Chilling (CC)
$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)