The first and second laws of thermodynamics were used to analyze a novel thermodynamic cycle proposed by Goswami in 1995 that uses an ammonia-water binary mixture as the working fluid, while producing both power and refrigeration simultaneously. The thermodynamic performance of the cycle was optimized for maximum second law efficiency using a commercially available optimization program. A maximum second law efficiency of 65.8% was obtained at a heat source temperature of 420 K. An exergy analysis was performed to study losses in different components of the cycle. It is seen that the largest contribution to cycle irreversibility comes from the absorber, with the rectifier and solution heat exchanger also contributing significantly. Irreversibility generation in the boiler is high at very low heat source temperatures, but drops at higher temperatures. (C) 2003 Elsevier Science Ltd. All rights reserved.