New Practice Exams (PPD) - Error

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    yueliu920

    I believe the answer is 17 years

    Initial cost of the new system / annual operations and maintenance savings comparing to old system

    Which is 

    312,500 / (46,875-28125) = 16.6 years, round up to 17 years. 

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    nrespecki (Edited )

    Hi Jennifer,

    Thank you for your post on the PPD practice exam item. You are correct, there is a typo in step 5 of the calculation, however, the answer is correct at 17 years. We have revised step 5 and also added an additional step to further clarify the calculation. Again, thank you for letting us know!

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    elifbayram

    The new system is going to cost $312,500 to install. If you kept the old system, the cost of operation and maintenance were gonna be $46,875. But with the new system, the operation costs went down by $18,750 (from $46,875 to $28,125).

    So every year, by installing this new system, the owner is going to save $18,750. Since they spent an upfront cost of $312,500 to install it, the payback time (from the savings of $18,750/year) can be found by dividing $312,500 by $18,750. Which is almost 17 years. In other words, in 17 years, this system will pay itself off.

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