Two traffic signal systems are being considered for an intersection. One system costs $34,000 for installation and has an efficiency rating of 75%, requires 30 kW power (output), incurs a user cost of $0.21 per vehicle, and has a life of 10 years. A second system costs $42,000 to install, has an efficiency rating of 88%, requires 32 kW power (output), has a user cost of $0.24 per vehicle, and has a life of 16 years. Annual maintenance costs are $80 and $95, respectively. MARR = 8% per rear. How many vehicles must use the intersection to justify the second system when electricity costs $0.08/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Could someone work through this problem and show how 261 is the right answer?
Two traffic signal systems are being considered for an intersection. One system costs $34,000 for installation and has an efficiency rating of 75%, requires 30 kW
power (output), incurs a user cost of $0.21 per vehicle, and has a life of 10 years. A second system costs $42,000 to install, has an efficiency rating of 88%, requires
32 kW power (output), has a user cost of $0.24 per vehicle, and has a life of 16 years. Annual maintenance costs are $80 and $95, respectively. MARR = 8% per
year. How many vehicles must use the intersection to justify the second system when electricity costs $0.08/kWh? Assume salvage value for each system equals
zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
At least 261 vehicles per day must use the intersection to justify the second system. (Round up to the nearest whole number.)
You answered: 281
Correct answer: 261 (Answer tolerance + 3)
Get answer feedback
Transcribed Image Text:Two traffic signal systems are being considered for an intersection. One system costs $34,000 for installation and has an efficiency rating of 75%, requires 30 kW power (output), incurs a user cost of $0.21 per vehicle, and has a life of 10 years. A second system costs $42,000 to install, has an efficiency rating of 88%, requires 32 kW power (output), has a user cost of $0.24 per vehicle, and has a life of 16 years. Annual maintenance costs are $80 and $95, respectively. MARR = 8% per year. How many vehicles must use the intersection to justify the second system when electricity costs $0.08/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. At least 261 vehicles per day must use the intersection to justify the second system. (Round up to the nearest whole number.) You answered: 281 Correct answer: 261 (Answer tolerance + 3) Get answer feedback
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