Power generation costs P3.20/kWh. Data for two 50-hp motors are as shown below. If the interest rate is 20%, determine how many hours the motors should be operated at full load for them to be economical. If a number of hours exceed the breakeven point, which of the two motors is more economical? Use (a) Annual Cost Method, (b) Use present worth method

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Power generation costs P3.20/kWh. Data for two 50-hp motors are as shown
below. If the interest rate is 20%, determine how many hours the motors should be operated at full load for them to be economical. If a number of hours exceed the breakeven point, which of the two motors is more economical? Use (a) Annual Cost Method, (b) Use present worth method

Motor A
Motor B
Initial cost
P45,000
P1,200
P53,000
Annual maintenance cost
P800
Annual operations cost
P11,000
P13,500
Efficiency
93%
89%
Taxes and Insurance
5%
8%
Economic life
10 years
10 years
Transcribed Image Text:Motor A Motor B Initial cost P45,000 P1,200 P53,000 Annual maintenance cost P800 Annual operations cost P11,000 P13,500 Efficiency 93% 89% Taxes and Insurance 5% 8% Economic life 10 years 10 years
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