A portable generator is needed at a remote construction site. Two alternatives are being considered. Their annual fixed costs and operating and maintenance costs per hour are shown in the table below. The contractor runs three 8-hour shifts per day for 250 working days per year.

a. How many hours per shift is a generator needed if the contractor is indifferent between the two generators?

b. If the site requires a generator for 2.5 hours per shift, which generator is preferred, and what is its estimated annual cost?

c. If the site requires a generator for 5.5 hours per shift, which generator is preferred, and what is its estimated annual cost?

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Generator Fixed Costs ($/yr) O&M Costs ($/hour) 1 $4,000 2 $8,000 $7.00 $5.50