Question

2-32 You are reevaluating the industrial heat pump choice that was made last year by your boss. The expected energy savings have not occurred because the pump is too small. Choice A, at $90,000, is to replace the pump with one that is the right size and sell the old one. Choice B, at $100,000, is to buy a small pump to use in tandem with the existing pump. The two-pump solution has slightly higher maintenance costs, but it is more flexible and reliable. What criteria should you use? Which choice would you recommend, and why?

Answer 1

Because the right size pump is indeed coming at a lower cost than that of the two pump model and apart from that it is also seen that the two pump model has higher maintenance costs than that of single pump model where there's also scrap value for older pump of sold this would add on the benefit in the single pump model, in all the departments buying the right size pump is benefitting the purpose and therefore spending$90,000 and buying the right pump would be the apt choice.