. A 50 horsepower motor is required to power a large capacity blower. Two motors A and...
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Question:
. A 50 horsepower motor is required to power a large capacity blower. Two motors A and B, mutually exclusive, have been proposed. Their cost data are given in Table 3. The MARR is 5% per year. Determine which alternative should be selected if the analysis period is 15 years, the repeatability assumption does not apply and the machines can be leased for $12,000 per year after the useful life of either machine is over.
Table 3
| Motor A | Motor B |
Capital investment | $9,000 | $8,000 |
Annual expenses | $5,000 | $6,000 |
Useful life | 10 years | 15 years |
Market value at the end of useful life | $0 | $1,000 |
Annual leasing cost after useful life | $12,000 | $12,000 |
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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