Continue operating with the current heat exchange

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Reference no: EM132021070

Your company is considering purchasing a new high efficiency heat exchanger that would save $135 per month in operating and maintenance costs for the next ten years. The purchase price of this heat exchanger is $21,000. After ten years the expected salvage value of the heat exchanger is $5,10o. Calculate the equivalent uniform monthly cost of this purchase assuming an annual interest rate of 1.12%. Should your company purchase this heat exchanger or continue operating with the current heat exchanger, which is expected to have no salvage value in ten years?

Reference no: EM132021070

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