Why an air handling system must be purchased

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Reference no: EM13199467

An air handling system must be purchased for your company. The best estimates for the first costs, yearly costs (O&M) and yearly benefits (Energy savings) are given below. However, uncertainty exists about the disposal cost and energy savings. The MARR is 5%; taxes and inflation can be ignored.

System Life First Cost O&M/Yr. Energy Savings/Yr. Disposal Cost at End of Life
AH2000 10 yrs. -$10,000 -$2,000 $5,000 -$4,000

Create a Sensitivity Graph ("spider plot") on the following page to show +/- 50% deviations in the Present Worth of the system for two of the variables above: Disposal Cost at end of life and Energy savings/yr. (Note: only five calculations of the PW are needed calculated to define the graph lines for the two variables: the base case PW and the PW for the +50% and -50% values of each of the two variables.)

Reference no: EM13199467

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