Questión 4 Consider providing electricity to a home which needs 10 kW of power by the two options & B given below. The interest rate is 10%, 25 year lifetime, zero inflation, no taxes and 2 insurance. Cost item Diesel option (A) PV option (B) Capital cost $ 12000 50000

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Question 4
Consider providing electricity to a home which needs 10 kW of power by the two options A
& B given below. The interest rate is 10%, 25 year lifetime, zero inflation, no taxes and 2%
insurance.
Cost item
Diesel option (A)
PV option (B)
Capital cost $
12000
50000
Operating & maintenance cost
$/year
10000
1000
Salvage value $
2000
1000
Evaluate the two options using,
Annual cost basis.
а.
b.
Life cycle cost basis.
с.
Return on investment.
Transcribed Image Text:Question 4 Consider providing electricity to a home which needs 10 kW of power by the two options A & B given below. The interest rate is 10%, 25 year lifetime, zero inflation, no taxes and 2% insurance. Cost item Diesel option (A) PV option (B) Capital cost $ 12000 50000 Operating & maintenance cost $/year 10000 1000 Salvage value $ 2000 1000 Evaluate the two options using, Annual cost basis. а. b. Life cycle cost basis. с. Return on investment.
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