6-45

Different Lives A pump is needed for 10 years at a remote loca- tion. 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 an annual cash flow analysis and an 6% interest rate. How should the pump be powered? 645 Gasoline Elect ric s2400Xo Annual operating cost 1200 250 First cost $9000 Annual maintenance Salvage value Life, in years 300 300 50 600 10