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A single zone heating unit is being used in a small office building. A variable...

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A single zone heating unit is being used in a small office building. A variable air volume system retrofit can be purchased and installed for a cost of $100,000. The retrofit system is estimated to save 450,000 kilowatt hours per year for its economic life of 10 years. The company uses a MARR of 10%. If the company pays $0.06 per kWh for electricity, and the system will have a salvage value of $500 at the end of its life, should the new system be purchased? The cash flow table for this example is shown below; in tabular form. O Analyze the options using a spreadsheet and recommend the more cost effective option using the following methods: Simple Payback (SPB) Present Worth or Net Present Value (NPV) Benefit-to-Cost Ratio (BCA) - undiscounted . Return on investment (ROI) - undiscounted Due Sunday Feb 14 10 pmokok EOY 0 1 2 3 4 5 Cash Flow S100,000 450,000 kWh (S0.06/kWh. $27,000 $27,000 $27,000 $27,000 $27.000 $27,000 $27,000 $27.000 $27.000 $27,000 - 500 = $27.500 6 7 8 9 10

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