5. A company is considering two types ot lo associated costs are showt oil heate

Question

5. A company is considering two types ot lo associated costs are showt oil heaters ea cost for water heaters. The annual cost of operation for the oil heaters heaters equals 365x12.03/FEx Electricity cost n electric heater? xFost of op in the table below. The estimated xFuel cost per Btu. The estimated annu e shown in th 41045/FE HOW equals 365x per kWh. How used an e saved each year if the company used an Oil $36000 1.7 Alternative Price of water heater FE Fuel cost Annual maintenance costs $39000 2.05 0.095KWh $0.0000064/Btu $500 $1000

Explanation / Answer

Answer:

annual cost of operation for oil heaters = 365 x 41045/EF x Fuel Cost per Btu

= 365*41045/1.7*$0.0000064 = $56.4

Annual maintenance costs - $500.00

annual cost of operation for electric heaters = 365 x 12.03/EF x Electricity Cost per kWh

= 365 x 12.03/2.05 x $0.95= $2034.83

Annual maintenance costs - $1,000.00

annual savings = $3034.83 - $556.4 = $2478.43

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