Data for two 50-h motors are follows: Power cost is 2.00 per kWh. If money is worth 20%, how many hours per year would the motors have to be operated at full load for them to be equally economical? If the expected number of hours of operation per year exceeds the break-even point, which motor is more economical? (Use ROR and AC and draw the breakeven chart)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Data for two 50-h motors are follows:

Power cost is 2.00 per kWh. If money is worth 20%, how many hours per year would the
motors have to be operated at full load for them to be equally economical? If the
expected number of hours of operation per year exceeds the break-even point,
which motor is more economical? (Use ROR and AC and draw the breakeven chart)

Alpha Motor
37,500
Beta Motor
Original Cost
48,000
Annual Maintenance
1,500
750
Life, years
Efficiency
Taxes and Insurance
10
10
87%
87%
3%
3%
Transcribed Image Text:Alpha Motor 37,500 Beta Motor Original Cost 48,000 Annual Maintenance 1,500 750 Life, years Efficiency Taxes and Insurance 10 10 87% 87% 3% 3%
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