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An owner of two existing commercial building is considering the possibility of retrofitting them for energy conservation. Both buildings are otherwise in good condition and are expected to last for another 30 years. Preliminary investigations indicate that technologically a solar energy system with 25 years of useful life is most suitable for building 1, and a heat recovery system with 18 years of useful life is most suitable for building 2. What planning horizon should be used for the economic analysis of these two projects? A construction contract of a large power plant requires payments by the owner to the contractor at year ends according to some portions of work completed during the six years of construction. The contractor's expenses at year ends are shown in the C, column and the owner's payments in the B1 column in Table 5.2. Find the net cash flows Al for the project. Using a 10% interest rate, determine which alternative, if any, should be selected, based on net present worth. Projects X and Y have first costs of exist6, 500 and exist17,000, respectively. Project X has net annual benefits of exist2,000 during each year of its 5-year useful life, after which it can be replaced identically. Project Y has net annual benefits of exist3,000 during each year of its 10-year life. Use present worth analysis, and an interest rate of 10% to determine which project to select. An engineering analysis by net present worth (NPW) is to be made for the purchase of two devices A and B. If an 8% interest rate is used, recommend which device to be purchased

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