Question: A replacement electric motor is being considered for purchase. It is capable of providing 200 hp. The pertinent data are follows: Cost - 3200 dollars

A replacement electric motor is being considered for purchase. It is capable of providing 200 hp. The pertinent data are follows:

Cost - 3200 dollars

Electric efficiency - 0.85 dollars

Maintenance Cost per year - 50 dollars

Life expectancy - 14years

Salvage value after 14 years - 0 dollars

The motor is used for 400 h/year and the cost of electricity is 0.0 dollars/kWh. What is most nearly the effective annual cost using an interest rate of 10%

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