Document VmL6yB9x444OBddLqzKbNRno

952 CHAPTER 44 1953 Guide ing or heating, and: ventilating system, include costs of electrical work, plumbing, miscellaneous /piping, building alterations,. cutting, patching, furring in of ducts or pipes, foundations, structural supports, remodeling or redecorating after installation, consulting engineer's fees, licenses, per mits, etc. These vary so widely that no approximations are possible, and each case must be considered alone. The length of the amortization -period to be used depends upon: the type and remaining life of the building or space for which the system is to be used; the type of equipment to be employed as a part of the system; the character of the business; and the lease or ownership conditions. Table 3. Owning and Operating Cost First Cost Annual Service Cost Cost of mechanical system.'. Other costs......................... . First Cost (FC)--Total.. Annual Fixed Charges Amortisation--Depreciation period Y years......................................... Interest rate 1%............................... Amortization and Depreciation FC Y ~......................................... Interest: Y 4-1 X / .................. Taxes................................................. Insurance.......................................... Rent............... .................................. Annual Fixed Charges: (Total)....... . ......................... Annual Maintenance Costs Replacement or servicing of air filters............................................... Outside Maintenance service............ Water Treatment............................... Lubricating oil and grease................ Painting for corrosion protection or other purposes.................... ;......... Replacement of worn parts.............. Refrigerant......................................... Wages of engineer or operator.......... Annual Maintenance Cost-- TOTAL.................................... Electric Power Costs Fans............................................ Pumps--Chilled water................. Pumps--Condenser water............ Pumps--Well-water...................... Cooling tower fans........................ ' Cooling tower pumps................... Refrigeration machines........ ..... Miscellaneous or other.............. . Gas.................................................... Coal..:.............................................. Oil--for boilers or Deisel engines... Steam For Direct Heating...................... For Ventilation:--preheaters...... For Ventilation--reheaters.. For Turbine driven equipment... For Engine driven equipment.... Sewers Charges for discharging water into public drainage systems... Condenser water.............................. Annual Service Costs-- TOTAL...................................... Summary Annual Fixed Charges.................... Annual Service Costs...................... Annual Maintenance Costs............. Annual Owning and Operating Costs--TOTAL............................. Depreciation, due to deterioration and obsolescence, must also be con sidered in arriving at the amortization period. Deterioration and mainte nance generally go hand in hand. If a long depreciation period is to be used, then the item for maintenance, repair and replacement of wearing parts must be greater than for a short depreciation period. An approximation of the useful life of various items of equipment and parts of systems is shown in Table 2. It should be noted that if an appro priate maintenance item is not established, the rate of equipment deteriora tion may be increased substantially. Interest The interest chargeable may be based on the average money- rate for the period in which the first cost of the equipment will be amortized. Owning and Operating Costs 953 Some accountants do not include interest in the annual fixed charges,, as they consider it a negligible item.- J The formulas for computing interest and amortization are given in Table 3. This table will also serve as a check list of the various compo nents to be considered in determining owning and operating costs. Taxes , The taxes chargeable will be the proportion of property tax caused by the increased valuation of the property due to air. conditioning. Insurance . The rate for insurance may vary considerably depending on the type of structure in which the equipment is located and upon other governing factors. A rate of about $Q.60 per $1,000 may be considered as being representative of normal installations. Table 4. Approximate Maintenance Cost for Large Air Conditioning Installations, Using High Quality Equipment Dollars per Ton per Year RepaiiB for refrigeration machinery.................... ............... Refrigerant............................................ ............................. Painting (Water boxes and dehumidifiers)........................... Filters, clean and re-oil 4 times per year.............................. Controls, outside service....................................................... Cleaning air conditioners..... .......................................... . 0.96 0.40 ' o.ii 0.40 1.36 0.24 1.19 Rent If the equipment under consideration is to be located in rented or leased quarters, it may be necessary to include an item for space rental. MAINTENANCE COSTS Maintenance costs include replacement parts and the labor required for making repairs, replacing parts, cleaning, painting, etc. It should be noted that major overhauling or complete replacement may restore the capital value of certain items of equipment, and in such cases the costs incurred may not necessarily be charged as maintenance costs. Generally, routine labor requirements will be the function of an operating engineer or staff, and the responsibility of this group may extend beyond the equipment being discussed here; hence, it is important to include only an equitable share of the time of this group. Extraordinary repairs involving special machinery will usually be covered by contract with equipment service divi sions, and should be accounted-for on that basis. Many of the items included in maintenance costs are highly variable and depend on the type and quality of the purchased1 equipment. For