are being Motors from two different manufacturers considered for application. Both motors are 50 hp, 460 volts, 3 phase and 60 hertz, but motor A operates at 80% efficiency whereas motor B operates 88% efficiency. The expected life of motors is 15 years. Motor A costs P60,000 and Motor B costs P75,000. Electrical energy costs P2 per kW-hr and the motors will be operated 8 hrs per day, 250 days per year. Assume taxes are 3%. Which motor should be purchased if money is worth 15%.

are being Motors from two different manufacturers considered for application. Both motors are 50 hp, 460 volts, 3 phase and 60 hertz, but motor A operates at 80% efficiency whereas motor B operates 88% efficiency. The expected life of motors is 15 years. Motor A costs P60,000 and Motor B costs P75,000. Electrical energy costs P2 per kW-hr and the motors will be operated 8 hrs per day, 250 days per year. Assume taxes are 3%. Which motor should be purchased if money is worth 15%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

with
-given
-formula
-solution

pls explain too

1. From Sample Problem 1, prove that Motor B is the best alternative by using: (a) Present
Worth Cost Method; (b) Future Worth Cost Method; (c) Equivalent Uniform Annual Cost
Method.

Sample Problem 1
are being
Motors from two different manufacturers
considered for application. Both motors are 50
hp, 460 volts, 3 phase and 60 hertz, but motor A
operates at 80% efficiency whereas motor B
operates 88% efficiency. The expected life of
motors is 15 years. Motor A costs P60,000 and
Motor B costs P75,000. Electrical energy costs P2
per kW-hr and the motors will be operated 8 hrs
per day, 250 days per year. Assume taxes are 3%.
Which motor should be purchased if money is
worth 15%.

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