A firm is considering replacing the existing industrial air conditioning unit. They will pick one...
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A firm is considering replacing the existing industrial air conditioning unit. They will pick one of two units. The first, the AC360, costs $26,427.00 to install, $5,157.00 to operate per year for 7 years at which time it will be sold for $6,951.00. The second, RayCool 8, costs $41,331.00 to install, $2,102.00 to operate per year for 5 years at which time it will be sold for $9,060.00. The firms cost of capital is 6.63%. What is the equivalent annual cost of the RayCool8? Assume that there are no taxes. ( Round 2 decimal places)
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