Document nmQ0G7bRXeDp2bxdMoremGMD2

1094 CHAPTER 43 1958 Guide y' referral to Schedule F which is issued by the Bureau of Internal Revenue and summarized in Table 2. Interest The interest charged.to the cost of' ownership may be based upon the average interest rate for the period during which the first cost of the equip ment will be amortized. While some accountants' do not include interest in the annual fixed charges and consider it a negligible item, the money invested in air conditioning, heating, , or ventilating equipment, must be either borrowed or diverted from the owner's funds and converted to the Table 2. Probable Useful Life of Equipment* Life in Years 1. Heat Producing Equipment (a) Boilers................................................................. (b) Stokers and burners.......... ...................... 2. Heat Distributing Equipment (o) Piping--copper............................................... (6) Piping--iron................................. ............. (c) Radiation--concealed.................................. (d) Radiation--direct......................................... (e) Valves and specialties................................ 3. Air Handling Equipment () Filters--automatic....................................... () Heating and cooling ooils......................... (c) Spray humidifiers and dehumidifiers . (d) Fans......... ......................................................... () Air conditioning units................................ (/) Motors................................................................. (g) Electrical starting equipment................ (A) Pneumatic control systems..................... (t) Electric control systems............................ 4. Ata Distributing Equipment (a) Ductwork.......................................................... (&) Outlets, grilles................................................ (e) Duct insulation.............................................. 5. Refrigerating Equipment () Centrifugal refrigerating machines___ () Reciprocating refrigerating machines. (c) Motors and starters...................................... (d) Piping--copper.............................................. (e) Piping--steel.................................................... if) Pumps....-..................................... ............... 6. Water Saving Devices () Evaporative condensers............................ () Cooling towers................................................ (e) Wells................................................................. 20 same as bldg. 20 25 25 10 20 20 10 15 10 20 20 15 15 same as bldg. 15 20 20 20 20 20 20 20 15 15 25 * Taken from U. S. Bureau of Internal Revenue Schedule of Probable Useful Life, revised 1942. piirpose of making the installation. Whether it is borrowed or taken from surplus funds, the money that might have been earned as interest is prop erly chargeable to the operation of the system. The formulas for computing interest and amortization are given in Ta ble 3. This table also serves as a check list for the various items to be considered in calculating the cost of ownership and operation. Taxes The taxes which may be charged to the property as a result of the im provement due to the installation of an air conditioning system will vary according to the practice of the official agencies levying property taxes. Owning and Operating Costs 1095 Insurance Insurance against losses by fire is ordinarily secured by increasing.the building fire insurance coverage to cover all or part of the first cost of in stalling the air conditioning and other mechanical systems. Various types of extended coverage are available for protection against a number of other types of losses. ' Boiler insurance may be extended to cover the air conditioning equip ment to protect against losses due to explosion, rupture of piping, and similar hazards. Since insurance rates vary widely depending upon the type of structure in which the equipment is located and the nature of the owner's business, the rates are usually set by rating organizations specializ- Table 3. Owning and Operating Cost First Cost Annual Service Cost Cost of mechanical system........ Other costs........................................ First Cost CFC)--Total........ Annual Fixed Charges Amortization--Depreciation period Y years.................................................... Interest rate i%........................#.............. Amortization and Depreciation FC _ Y ................................................. Y+1 Interest: --- X i X cost =........ 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--reheateis............. 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........................................ ing in this work. Exact figures on insurance cannot be determined with out consultation with the owner's underwriter. Rent If the equipment under consideration is to be located in rented or leased quarters, or if additional space must be rented, such expense becomes a fixed charge. MAINTENANCE COSTS Maintenance charges consist of expense for labor and material necessary to make repairs and replace parts, as well as cleaning, painting, inspection, etc. for the purpose of eliminating or minimizing the need for repairs. Generally, routine maintenance labor requirements will be the function of an operating engineer or staff. If the responsibility of this group may