A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $11,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel expense for running the turbine is $7.25 per hour, and the turbine is expected to operate 2,900 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $9,000. a. If the MARR is 16% per year, what is the annual equivalent life-cycle cost of the gas turbine? b. What percent of annual life-cycle cost is related to fuel?
A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $11,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel expense for running the turbine is $7.25 per hour, and the turbine is expected to operate 2,900 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $9,000. a. If the MARR is 16% per year, what is the annual equivalent life-cycle cost of the gas turbine? b. What percent of annual life-cycle cost is related to fuel?
Chapter1: Making Economics Decisions
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![A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $11,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation
and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel expense for running the turbine is $7.25 per hour, and the turbine is expected to operate
2,900 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $9,000.
a. If the MARR is 16% per year, what is the annual equivalent life-cycle cost of the gas turbine?
b. What percent of annual life-cycle cost is related to fuel?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb263996-7a5f-4fcc-bed9-c8dd1fb64210%2F2bc34045-8a81-4296-8611-d7a92abe1d75%2Fo2liwh5_processed.png&w=3840&q=75)
Transcribed Image Text:A 50-kilowatt gas turbine has an investment cost of $40,000. It costs another $11,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation
and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel expense for running the turbine is $7.25 per hour, and the turbine is expected to operate
2,900 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $9,000.
a. If the MARR is 16% per year, what is the annual equivalent life-cycle cost of the gas turbine?
b. What percent of annual life-cycle cost is related to fuel?
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