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ThermalSolns

# ThermalSolns - Design of Alternative Energy Systems...

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1 ME 417 Design of Alternative Energy Systems Thermal/Economics Practice Problems 1. A company has decided to air condition their manufacturing facility. They are trying to decide between an absorption refrigeration system and a vapor compression refrigeration system. The following economic data is available: Absorption System Vapor Compression System Capital Cost \$125,000 \$85,000 Annual Operating Cost \$15,000 \$20,000 The life of both systems is estimated to be 15 years and the interest rate for the company is 13%. Using a present value analysis determine which system should be purchased. What would be the annual operating cost of the vapor compression system needed to make the two systems equivalent in terms of cost? Solution: Our present value for either system will be calculated from N) (i, A P A + P = PV op cap where our P/A function is given by ( ) ( ) ( ) ( ) 6.4624 = 0.13 + 1 13 . 0 1 0.13 + 1 = i + 1 i 1 i + 1 = A P 15 15 N N - - Then ( ) PV = 125,000 + 15,000 6 \$221,936 A = .4624 and ( ) \$214,248 4624 . 6 20,000 + 85,000 = PV V = So the vapor compression system has the lower cost and should be purchased. Since electricity prices have a tendency to increase over time, it might be of interest to determine an operating cost for the vapor compression system that would make its cost equivalent to that of the absorption system. Hence we want ( ) ( ) \$221,936 = PV = PV A V

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ME 417 Design of Alternative Energy Systems 2 so that ( ) ( ) ( ) \$21,890 = 6.4624 85,000 - 221,936 N) (i, A P P - PV = A V cap A V op = or a 6% increase. 2. A homeowner is considering replacing their current gas fuel heating system with a solar heating system. Both systems are to last 20 years and the homeowner’s interest rate is 8%. The initial cost for the furnaces is \$1200 and the annual fuel cost \$600. Determine the capital cost of the solar system that will make it competitive with the gas fueled system.
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ThermalSolns - Design of Alternative Energy Systems...

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