= -25,000 - 500(P/A,8%,10) + 2,000(P/F,8%,10) = -25,000 - 500(6.7101) + 2,000(0.4632) = -25,000 - 3,355 + 926 = -$27,429
| | Solar + Battery | Diesel Gen | |--------------|----------------|-------------| | Initial Cost | $25,000 | $8,000 | | Annual O&M | $500 | $2,500 | | Fuel cost | $0 | $3,000 (escalating 5%/yr) | | Lifespan | 10 years | 5 years (then replace) | | Salvage value | $2,000 | $500 | | MARR (hurdle rate) | 8% | 8% |
Second gen at year 5: (-8,000 + 500 salvage of first?) Wait — careful. Actually:
Better: PW = -8,000 - 5,500(P/A,8%,5) + 500(P/F,8%,5) - 8,000 - 500 - 5,500(P/A,8%,5)(P/F,8%,5) But accelerated trick: Use instead.
= -25,000 - 500(P/A,8%,10) + 2,000(P/F,8%,10) = -25,000 - 500(6.7101) + 2,000(0.4632) = -25,000 - 3,355 + 926 = -$27,429
| | Solar + Battery | Diesel Gen | |--------------|----------------|-------------| | Initial Cost | $25,000 | $8,000 | | Annual O&M | $500 | $2,500 | | Fuel cost | $0 | $3,000 (escalating 5%/yr) | | Lifespan | 10 years | 5 years (then replace) | | Salvage value | $2,000 | $500 | | MARR (hurdle rate) | 8% | 8% |
Second gen at year 5: (-8,000 + 500 salvage of first?) Wait — careful. Actually:
Better: PW = -8,000 - 5,500(P/A,8%,5) + 500(P/F,8%,5) - 8,000 - 500 - 5,500(P/A,8%,5)(P/F,8%,5) But accelerated trick: Use instead.