Power cost is P2 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?

Power cost is P2 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?

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

100%

Data for two 50-hp motors are as follows:
Alpha motor
Beta motor
Original cost
P37 500
P48 000
Annual maintenance
1500
750
Life, years
Efficiency
10
10
87%
92 %
Taxes and insurance
3%
3%
Power cost is P2 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?

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