U shape multitube heat exchanger was equipped in the flue to recover the exhaust heat from the boiler system. The fluids of the exhaust heat recovery equipment were the flue gas as the hot fluid, and the water as the cold fluid. The flow geometry of the fluids was cross flow - two pass, the hot fluid being mixed and the cold fluid unmixed. The results of the theoretical and the experimental analysis and the economic evaluation are summarized as follows. 1) The heat exchanger effectiveness and the temperature efficiency of the hot fluid were about 35% when the fuel consumption rate was 140 - 150 L/15min. The temperature efficiency for the cold fluid ranged from 3.0% to 4.5%. The insulation efficiency ranged from 85% to 98%, which was better than the KS air preheater insulation efficiency of 90%. 2) The relationship between the fuel consumption rate, F, and the outlet temperature, $T_{h2}$, of the flue gas from the heat exchanger was $T_{h2}$ = 0.927F + 110. In order to prevent the low temperature corrosion from the coagulation of $SO_3$, it is necessary to maintain the fuel consumption rate above 82 L/15min. 3) The ratio of the exhaust heat from the boiler system to the total energy consumption was about 14.5%. With the installation of the exhaust heat recovery equipment, the energy recovery ratio to the exhaust heat was about 25%. Accordingly, about 3.6% of the total fuel consumption was estimated to be saved. 4) Economic analysis indicated that the installation of the exhaust heat recovery equipment was feasible to save the energy, because the capital reocvery period was only 10 months when the fuel consumption rate was 80 L/15min. 4 months when it was 160 L/15min. 5) Based on the theoretical and the experimental analysis, it was estimated to save the energy of about 18 million Won per year, if four heat exchangers are installed in a factory. 6) A further study is recommended to identify the relationship among the flow rate of the exhaust gas, the size of the heat exchanger and the capacity of the air preheater. For a maximum heat recovery from the exhaust gas an automatic control system is required to control the flow rate of the cold fluid depending on the boiler load.