Data for two 50-hr motors are follows: Original Cost Annual Maintenance Life, years Kawasaki Motor 48,000 750 10 Efficiency 92% Taxes and Insurance 3% The cost of electricity per kilowatt-hour is two dollars. If money has a value of 20%, how many hours per year must the motors run at full load to be equally economical? Which motor is more affordable if the predicted number of operating hours per year is more than the break-even point? a. Calculate the power consumption of Honda Motors in terms of X. b. Calculate the power consumption of Kawasaki Motors in terms of X. c. Solve for the break-even point. Honda Motor 37,500 1,500 10 87% 3%

Data for two 50-hr motors are follows: Original Cost Annual Maintenance Life, years Kawasaki Motor 48,000 750 10 Efficiency 92% Taxes and Insurance 3% The cost of electricity per kilowatt-hour is two dollars. If money has a value of 20%, how many hours per year must the motors run at full load to be equally economical? Which motor is more affordable if the predicted number of operating hours per year is more than the break-even point? a. Calculate the power consumption of Honda Motors in terms of X. b. Calculate the power consumption of Kawasaki Motors in terms of X. c. Solve for the break-even point. Honda Motor 37,500 1,500 10 87% 3%

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

Data for two 50-hr motors are follows:
Honda Motor
Kawasaki Motor
Original Cost
Annual Maintenance
Life, years
Efficiency
Taxes and Insurance
The cost of electricity per kilowatt-hour is two dollars. If money has a value of 20%, how many
hours per year must the motors run at full load to be equally economical? Which motor is more
affordable if the predicted number of operating hours per year is more than the break-even point?
a. Calculate the power consumption of Honda Motors in terms of X.
b. Calculate the power consumption of Kawasaki Motors in terms of X.
c. Solve for the break-even point.
37,500
48,000
750
1,500
10
10
87%
3%
92%
3%

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Step 1: Define break-ven point

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Step 2: a. Compute the power consumption by Motor H

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Step 3: b. Compute the power consumption by Motor K

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Step 4: c. Compute the break-even point

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