Motorsfrom two different manufacturers are being considered for application. Both motors are 50Hp, 460 volts, 3 phase, 60 cycles. Honda Motor operates at 80% efficiency and Rusi Motor operates at 89% efficiency. The expected need for the motors is 15 years. Honda Motor cost P120, 000.00 and Rusi Motor P150, 000.00. Electrical energy cost P8.00 per Kw-Hr and the motors will be operating 8 hours per day, 250 days a year. Assume taxes and insurance are 3% of first cost. Which motor is better to purchased Honda Motor or Rusi Motor?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Motorsfrom two different manufacturers are being considered for application. Both motors are 50Hp, 460 volts, 3 phase, 60 cycles. Honda Motor operates at 80% efficiency and Rusi Motor operates at 89% efficiency. The expected need for the motors is 15 years. Honda Motor cost P120, 000.00 and Rusi Motor P150, 000.00. Electrical energy cost P8.00 per Kw-Hr and the motors will be operating 8 hours per day, 250 days a year. Assume taxes and insurance are 3% of first cost. Which motor is better to purchased Honda Motor or Rusi Motor?

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