A company is considering two types of water heaters. The associated costs are sh
ID: 2505550 • Letter: A
Question
A company is considering two types of water heaters. The associated costs are shown below. The estimated annual cost of operation for oil heaters equals 365 x 41045/EF x Fuel Cost per Btu. The estimated annual cost of operation for electric heaters equals 365 x 12.03/EF x Electricity Cost per kWh. How much money could be saved each year if the company used an oil heater?Alternative:
Electricity
Price of water heater - $39,000.00
EF - 2.05
Fuel cost - $0.95 /kWh
Annual maintenance costs - $1,000.00
Oil
Price of water heater - $36,000.00
EF - 1.7
Fuel cost - $0.0000064 /Btu
Annual maintenance costs - $500.00 A company is considering two types of water heaters. The associated costs are shown below. The estimated annual cost of operation for oil heaters equals 365 x 41045/EF x Fuel Cost per Btu. The estimated annual cost of operation for electric heaters equals 365 x 12.03/EF x Electricity Cost per kWh. How much money could be saved each year if the company used an oil heater?
Alternative:
Electricity
Price of water heater - $39,000.00
EF - 2.05
Fuel cost - $0.95 /kWh
Annual maintenance costs - $1,000.00
Oil
Price of water heater - $36,000.00
EF - 1.7
Fuel cost - $0.0000064 /Btu
Annual maintenance costs - $500.00
Explanation / 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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