QUESTION 1 The purchase price of a natural gas-fired commercial boiler (capacity

Question

QUESTION 1 The purchase price of a natural gas-fired commercial boiler (capacity X) WAS S400000 eight years ago. Another boiler of the same basic design, except with capacity 1.63X, is currently being considered for purchase. If it is purchased, some optional features presently costing S50000 would be added for your application. If the cost index was 118 for this type of equipment when the capacity X boiler was purchased and is 156 now, and the applicable cost capacity factor is 0.85, what is your estimate of the purchase price of the new boiler?

Explanation / Answer

Let

CA = cost of new boiler SA = 1.63 X

CB = cost of new boiler SB = X

CA = $400,000 *(156 /118) = $528,814

CB = $528,814 *(1.63 X/X)0.85 = $801,055

Total cost with options = $801,055 + $50,000 = $851,055

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.