Two pumps are being considered for service in Africa. Each can draw water from a depth of 50 meters and both pumps deliver 60 horsepower (output) to the pumping operation. One of the pumps must be selected. It is expected that the pump will be in use 800 hours per year and electricity costs $0.14 per kilowatt-hour. The following data are available. Recall that 1 hp = 0.746 kW. Capital investment Electrical efficiency Annual maintenance cost Useful life Pump A $2,400 0.92 $320 3 y 3 years Pump B $2,000 0.80 $200 6 years The MARR is 15% per year. Determine which alternative should be selected if the repeatability assumption applies.

Two pumps are being considered for service in Africa. Each can draw water from a depth of 50 meters and both pumps deliver 60 horsepower (output) to the pumping operation. One of the pumps must be selected. It is expected that the pump will be in use 800 hours per year and electricity costs $0.14 per kilowatt-hour. The following data are available. Recall that 1 hp = 0.746 kW. Capital investment Electrical efficiency Annual maintenance cost Useful life Pump A $2,400 0.92 $320 3 y 3 years Pump B $2,000 0.80 $200 6 years The MARR is 15% per year. Determine which alternative should be selected if the repeatability assumption applies.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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