Description of this paper

City administration Problem

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solution


Question

Question;City administration is considering refurbishing the lighting system of its administration building. After initial investigation, the city procument office has narrowed down the choices into the following two options: Option 1 is a Urgolight system, which costs $500,000 to purchase and instrall. Option 2 is a convention system, which costs $100,000 to purchase and instrall. The system is expected to last for 20 years The energe and maintenance cost for Option 1 is $20,000 and $2,000. The energe and maintenance cost for Option 1 is $50,000 and $10,000. Assume all gas costs paid at end of year. Real discount rate: 4% Which lighting system should the city selected based on financial consideration. Note: please use LCC analysis to facilitate the decision-making.

 

Paper#45423 | Written in 18-Jul-2015

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