Pump Model SP240 HEPS9 Capital investment Annual expenses: Electrical energy Maintenance $33,200 $47,600 S2,165 $1,720 S1,100 in year 1, and increasing S500/yr thereafter $500 in year 4, and increasing $100/yr thereafter Useful life (years) Market value (end of useful life) 5,000
What would the capital investment amount for pump SP240 have to be such that the firm would be indifferent as to which pump model isselected? You are a member of an engineering project team that is designing a new processing facility. Your present design task involves the portion of the catalytic system that requires pumping a hydrocarbon slurry that is corrosive and contains abrasive particles. For final analysis and comparison, you have selected two fully lined slurry pump units, of equal output capacity, from different manufacturers. Each unit has a large diameter impeller required and an integrated electric motor with solid-state controls. Both units will provide the same level of service (support) to the catalytic system but have different useful lives and costs. The new processing facility is needed by your firm at least as far into the future as the strategic plan
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