A Company Is Considering Two Types of Water Heaters

Short Answer

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? $$\begin{array} { | l | l | l | } \hline \text { Alternative } & \text { Electricity } & \text { Oil } \\\hline \text { Price of water heater } & \$ 39,000 & \$ 36,000 \\\hline \text { EF } & 2.05 & 1.7 \\\hline \text { Fuel cost } & \$ 0.095 / \mathrm { kWh } & \$ 0.0000064 / \mathrm { Bt } \\&&u\\\hline \text { Annual maintenance costs } & \$ 1000 & \$ 500 \\\hline\end{array}$$