A local school wishes to install a new water filtration system as its old one failed years ago. The school determines the considered replacement will cost $78,000 and assumes the planning horizon is 5 years with a MARR of 10%. After the 5 years, the system will be salvaged for a value of $15,000. The school is unsure how much will be saved compared to buying bottled water for its students and staff though, and estimates it will save $15,000, $20,000, or $25,000 annually. Which Excel® entry should you use to determine the minimum savings required to justify the replacement of the water filtration system? O=(78000-15000 PV (10 %, 5.0,-1))/PV( 10 %.5.-1) Ⓒ-(78000-15000 FV (10 %, 5.0,-1) ) / FV( 10%, 5, -1) O=(78000-25000 PV(10 %.5.0-78000))/PV( 10 %,5-78000) O-(78000-15000 PMT ( 10 % ,5 ,0-1))/PMT( 10 %,5,-1)

A local school wishes to install a new water filtration system as its old one failed years ago. The school determines the considered replacement will cost $78,000 and assumes the planning horizon is 5 years with a MARR of 10%. After the 5 years, the system will be salvaged for a value of $15,000. The school is unsure how much will be saved compared to buying bottled water for its students and staff though, and estimates it will save $15,000, $20,000, or $25,000 annually. Which Excel® entry should you use to determine the minimum savings required to justify the replacement of the water filtration system? O=(78000-15000 PV (10 %, 5.0,-1))/PV( 10 %.5.-1) Ⓒ-(78000-15000 FV (10 %, 5.0,-1) ) / FV( 10%, 5, -1) O=(78000-25000 PV(10 %.5.0-78000))/PV( 10 %,5-78000) O-(78000-15000 PMT ( 10 % ,5 ,0-1))/PMT( 10 %,5,-1)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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