Motors from two different manufacturers are being considered. Motor A is 45hp and Motor B is 60hp, both are 460 volts, 3-phase and 60 Hz, but motor A operates at 80% efficiency whereas motor B operates at 88% efficiency. The expected life of motor A is 20 years and Motor B is 18 years. Motor A costs P60,000 and Motor B costs P75,000. Electrical energy costs P2.00 per kwh and the motors will be operated 8 hours per day, 250 days per year. Motor A has P5000 year maintenance and Motor B has P4500 per year maintenance. Motor A has a salvage value of P3000. Assume taxes are 30%. Which motor should be purchased if money worth 15% and how much is needed yearly cost for this motor?

Motors from two different manufacturers are being considered. Motor A is 45hp and Motor B is 60hp, both are 460 volts, 3-phase and 60 Hz, but motor A operates at 80% efficiency whereas motor B operates at 88% efficiency. The expected life of motor A is 20 years and Motor B is 18 years. Motor A costs P60,000 and Motor B costs P75,000. Electrical energy costs P2.00 per kwh and the motors will be operated 8 hours per day, 250 days per year. Motor A has P5000 year maintenance and Motor B has P4500 per year maintenance. Motor A has a salvage value of P3000. Assume taxes are 30%. Which motor should be purchased if money worth 15% and how much is needed yearly cost for this motor?

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

Section: Chapter Questions

Problem 1PS

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