A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a power line is extended to the site. Otherwise a gasoline engine will be used. By applying a present worth analysis and using the following data, determine how the pump should be powered. Calculate PW gas (present worth for gasoline option) and PW electric (present worth for electric option). The MARR is 10%. Gasoline First Cost ($) Annual Operating cost ($) Annual Maintenance ($) Salvage value ($) Life in years 2400 1200 300 300 5 Electric 6000 750 50 600 10
A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a power line is extended to the site. Otherwise a gasoline engine will be used. By applying a present worth analysis and using the following data, determine how the pump should be powered. Calculate PW gas (present worth for gasoline option) and PW electric (present worth for electric option). The MARR is 10%. Gasoline First Cost ($) Annual Operating cost ($) Annual Maintenance ($) Salvage value ($) Life in years 2400 1200 300 300 5 Electric 6000 750 50 600 10
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please show ALL the steps and required formulas.
make sure the answer is CORRECT!
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Transcribed Image Text:A pump is needed for 10 years at a remote location. The pump can be driven by an
electric motor if a power line is extended to the site. Otherwise a gasoline engine will
be used. By applying a present worth analysis and using the following data,
determine how the pump should be powered. Calculate PW gas (present worth for
gasoline option) and PWelectric (present worth for electric option). The MARR is 10%.
Gasoline
First Cost ($)
Annual Operating cost ($)
Annual Maintenance ($)
Salvage value ($)
Life in years
2400
1200
300
300
5
Electric
6000
750
50
600
10
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