In auditing a 5 store, 22 unit apartment building, it is found that last year’s
ID: 2727742 • Letter: I
Question
In auditing a 5 store, 22 unit apartment building, it is found that last year’s fuel usage was 26.430 gallons of # 2 oil. After adjusting for weather conditions (by degree days) you find a usage of 29,450 gallons for a normal weather year.
A walk around the basement reveals there are many areas of uninsulated pipes, as follows: steam heating pipes- 100' of 3" pipe; domestic hot water (DHW)- 60' of 1 1/2" pipe. You calculate that insulating the pipes would save 500 gallons (in a normal weather year). Given an energy cost of $1.5 per gallon and an installed cost of $10 per linear foot for insulation of the 3" pipe and $6 per linear foot for insulation of the 1.5" pipe, what would be the simple payback in years for insulating the DHW pipes?
a) 0.77 years
b) 0.9 years
c) 1.1 years
d)1.3 years
Explanation / Answer
Cost of Pipe
100 *10 = 1000
Less 60 * 6 = 180
Total intial investment = 820
Net savings = 500 gallon * 1.50 =500*1.50=750
.Pay back period = 1.1 years
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