Question: 5. (20 Marks) A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a

 5. (20 Marks) A pump is needed for 10 years at

5. (20 Marks) A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a power line is extended to the site. Otherwise, a gasoline engine will be used. Use a present worth cash flow analysis, using the following data and a 10% interest rate, to determine how the pump should be powered. Calculate PW gas (present worth for gasoline option) and PW electric (present worth for electric option). Gasoline Electric First Cost $2 400 $6 000 Annual Operating cost $1 200 $750 Annual Maintenance $300 $50 Salvage value $300 $600 Life in years 5 10

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