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. Use a present worth cash flow analysis, using the following data and a 10% interest rate, to determine how the pump should be powered. Calculate PWgas (present worth for gasoline option) and PWelectric (present worth for electric option). First Cost Annual Operating cost Annual Maintenance Salvage value Life in years Select one: O All other answers are wrong Gasoline $2400 1200 300 OPWgas = O PWgas = O PWgas = O PW gas = 300 Which of the following statements is the best answer 5 Electric $6000 750 50 600 10 $7,900; PW electric = - - $10,685; Choose gasoline pump $15,550; PWelectric = $17,588; Choose gasoline pump $10,508; PWelectric = $9,685; Choose electric pump $12,805; PWelectric = $10,685; Choose electric pump

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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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. Use a present worth cash flow analysis, using the
following data and a 10% interest rate, to determine how the pump should be powered. Calculate PWgas (present worth
for gasoline option) and PWelectric (present worth for electric option).
First Cost
Annual Operating cost
Annual Maintenance
Salvage value
Life in years
Select one:
O All other answers are wrong
Gasoline
$2400
1200
300
OPWgas =
O PWgas =
O PWgas =
O PW gas =
300
Which of the following statements is the best answer
5
Electric
$6000
750
50
600
10
$7,900;
PW electric = - - $10,685; Choose gasoline pump
$15,550;
PWelectric = $17,588;
Choose gasoline pump
$10,508;
PWelectric =
$9,685;
Choose electric pump
$12,805; PWelectric = $10,685; Choose electric pump
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. Use a present worth cash flow analysis, using the following data and a 10% interest rate, to determine how the pump should be powered. Calculate PWgas (present worth for gasoline option) and PWelectric (present worth for electric option). First Cost Annual Operating cost Annual Maintenance Salvage value Life in years Select one: O All other answers are wrong Gasoline $2400 1200 300 OPWgas = O PWgas = O PWgas = O PW gas = 300 Which of the following statements is the best answer 5 Electric $6000 750 50 600 10 $7,900; PW electric = - - $10,685; Choose gasoline pump $15,550; PWelectric = $17,588; Choose gasoline pump $10,508; PWelectric = $9,685; Choose electric pump $12,805; PWelectric = $10,685; Choose electric pump
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