A small heat pump now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of S125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at 5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm’s MARR, which includes an allowance for general price inflation, is 18% per year (). No market value is expected from the heat pump at the end of the 18 years of service life. 2 Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year. a. What is the PW of owning and operating the heat pump? The PW is $- (Round to the nearest dollar.) b. () What is the AW, expressed in actual dollars, of owning and operaling the heat pump? The AW is $ (Round to the nearest dollar.) () What is the AW in real dollars of owning and operating the heat pump? The AW is $ (Round to the nearest dollar.)


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A small heat purip now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of $125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at
5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm's MARR, which includes an
allowance for general price inflation, is 18% per year (im). No market value is expected from the heat purmp at the end of the 18 years of service life.
E Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year.
a. What is the PW of owning and operating the heat pump?
The PW is $ . (Round to the nearest dollar.)
b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump?
The AW is $ (Round to the nearest dollar.)
(ii) What is the AW in real dollars of owning and operating the heat pump?
The AW is $ . (Round to the nearest dollar.)
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Transcribed Image Text:A small heat purip now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of $125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at
5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm’s MARR, which includes an
allowance for general price inflation, is 18% per year (im). No market value is expected from the heat purmp at the end of the 18 years of service life.
E Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year.
a. What is the PW of owning and operating the heat pump?
The PW is $ . (Round to the nearest dollar.)
b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump?
The AW is $ (Round to the nearest dollar.)
(ii) What is the AW in real dollars of owning and operating the heat pump?
The AW is $ . (Round to the nearest dollar.)
A small heat pump now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of S125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at 5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm’s MARR, which includes an allowance for general price inflation, is 18% per year (). No market value is expected from the heat pump at the end of the 18 years of service life. 2 Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year. a. What is the PW of owning and operating the heat pump? The PW is $- (Round to the nearest dollar.) b. () What is the AW, expressed in actual dollars, of owning and operaling the heat pump? The AW is $ (Round to the nearest dollar.) () What is the AW in real dollars of owning and operating the heat pump? The AW is $ (Round to the nearest dollar.)


5
A small heat purip now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of $125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at
5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm's MARR, which includes an
allowance for general price inflation, is 18% per year (im). No market value is expected from the heat purmp at the end of the 18 years of service life.
E Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year.
a. What is the PW of owning and operating the heat pump?
The PW is $ . (Round to the nearest dollar.)
b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump?
The AW is $ (Round to the nearest dollar.)
(ii) What is the AW in real dollars of owning and operating the heat pump?
The AW is $ . (Round to the nearest dollar.)
expand button
Transcribed Image Text:A small heat purip now costs $2,400 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of $125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at
5% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is S680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 10%. The firm’s MARR, which includes an
allowance for general price inflation, is 18% per year (im). No market value is expected from the heat purmp at the end of the 18 years of service life.
E Click the icon to view the interest and annuity table for discrete compounding when i= 18% per year.
a. What is the PW of owning and operating the heat pump?
The PW is $ . (Round to the nearest dollar.)
b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump?
The AW is $ (Round to the nearest dollar.)
(ii) What is the AW in real dollars of owning and operating the heat pump?
The AW is $ . (Round to the nearest dollar.)

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