Question 1
The conventional ventilation package for an office costs $44,000 installed. An equally suitable high-efficiency package costs $62,000. The efficient package reduces annual utility costs by $4,500 but increases annual maintenance costs by $1,500. The owner approves upgrades with a simple payback of no more than seven years. There are no incentives or other cost differences. The financial recommendation is:
Show answer & explanation
Correct answer: D - Approve: the upgrade pays back in six years.