Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 20% and the following cost estimates: Please Show your work Description Service life First cost Alt1 (Alpha) Alt2. (Beta) 7 11 $12,000 $22,000 0 $7,000 Annual operating cost $2,500 $1,200 Salvage value (a) Compute the equivalent annual costs of each alternative and recommend the economically superior alternative. (b) Determine a salvage value for the Beta system such that the Beta system will have an equivalent uniform annual cost equal to the Alpha system.
Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 20% and the following cost estimates: Please Show your work Description Service life First cost Alt1 (Alpha) Alt2. (Beta) 7 11 $12,000 $22,000 0 $7,000 Annual operating cost $2,500 $1,200 Salvage value (a) Compute the equivalent annual costs of each alternative and recommend the economically superior alternative. (b) Determine a salvage value for the Beta system such that the Beta system will have an equivalent uniform annual cost equal to the Alpha system.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Two types
of
power converters are under consideration for a specific application. An
economic comparison is to be made using a MARR of 20% and the following cost
estimates: Please Show your work
Description
Service life
First cost
Alt1 (Alpha)
Alt2. (Beta)
7
11
$12,000
$22,000
0
$7,000
Annual operating cost
$2,500
$1,200
Salvage value
(a) Compute the equivalent annual costs of each alternative and recommend the
economically superior alternative.
(b) Determine a salvage value for the Beta system such that the Beta system will have an
equivalent uniform annual cost equal to the Alpha system.
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