Financial And Environmental Impact Analysis Of Sustainable Retrofitting Case Solution & Answer

Discount rate is used to determine the present value and net present value of cash flows. BTB Company had determined the discount rate of 9.35%. However, when this rate is applied to present values, in order t calculate net present value, the result is obtained in positive terms. Therefore, this discount rate is considered as appropriate because positive NPV is determined from this rate.  The recommendation will surely be changing the decision. Because if the same discount rate is applied at other cash flow numbers, it may be resulted negatively or in such a large number which will not be acceptable.

The different escalation rates for electricity, water, water wastes and other resources are not appropriate. Because in real world, these process are increasing from such a large escalation ratios such as 12% increase in electricity, 18% rise in electricity et cetera. However, the recommendations will surely be impacted from escalation rates, as higher the escalation rates, higher will be its cost impact. Higher the cost, lesser will be operating and net profit. Therefore, with the changes in escalation cost, recommendations will be impacted.

The recommendations to install toilets, showerheads and faucets is due to their lower cost. As this option will provide financial profit, as well as it has a greater impact on environment. Because it is the most influence on environment and pollution. Therefore, higher the toilets will be cleaned and facilitating, better will be the environment and lesser pollution will be in air. Therefore, the first option, is financially as well as environmentally feasible.

Environmental impacts:

The redevelopment and upgrade of the Vintage Courts apartment regarding each room’s dual-flush toilets, faucets, showerheads, air-condition, dishwasher, heater appliance and water heater temperature would not only reduce the operating costs for the company but also would significantly impact on improvingthe country’s environment. Such as the installation on the dual-flush toilets would reduce the water flow rate by 0.6 gallon which is a low flow rate whereas the high flow rate would be 1.6 gallons. The existing flush-toilets uses a water average around 3.6 gallons which cause a high water usage. It was surveyed that around 47% of a household water flow occurs from bathrooms with being 27% water used on toilets. Most of the older toilets use around 3.5, 5 or even sometimes 7 gallons of water which are a huge wastage of water.

By developing new efficiency, dual-flush toilets on each of the apartment would reduce the water drainage and would impact in creating abetter environment. The upgrade of showerhead would also reduce the water flow rate by 1.5 gallons per minute from 2.75 gallons whereas the faucet upgrade would significantly reduce the water flow from 2.5 gallons per minute to 1.0 gallon per minute. With the upgrades and changes on each of the apartments, thebathroom would reduce the water flow and save it from being wastage which would be great for the environment.

The installment of the new dishwasher was also another step in improving the environment……………..

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