A motor with a.200-horsepower output is needed in the factory for intermittent use A Graybar motor costs

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A motor with a.200-horsepower output is needed in the factory for intermittent use A Graybar motor costs $7000, and has an electrical efficiency of 89%. A B1ueball motor costs $6000 and has an 85% efficiency. Neither motor would have any salvage value, as the cost to remove it would equal its scrap value. The annual maintenance cost for either motor is estimated at. $300 per year Electric power costs $0.072/kilowatt-hour (1 hp = 0.746 kW). If a 10% interest rate is used in the calculations, what is the minimum number of hours the higher initial cost Graybar motor must be used each year to justify its purchase?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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