You own a small business in a somewhat remote area. You have decided to install 25 KWs of backup power systems (batteries) to protect your business computers. They will provide the energy that you need to support your software designers and marketing staff in the event of a comercial power outage.
You found two kinds of 5 KW battery systems.
One from APC and one from Tesla.
The APC costs $400 per KW of capacity and has a four year life. At the end, it has a salvage value of $1000.
the Tesla costs $525 per KW of capacity and has a five year life. At the end, it has a salvage value of $1900..
In addition, your local power company charges you more during certain peak demand hours. By using your battery-stored energy during those periods you estimat that you will save $2500 per year for the full (25 KW) system.
a)Calculate the IRR for the APC battery.
b)Calculate the IRR for the Tesla Wind battery.
c)Calculate the EUAW for each full system at a MARR of 1.8%
d)Which battery system will you buy?