A) The equivalent annual costs for system A are $_____

B) The equivalent annual costs for system B are $_____

C) What is the equivalent operating cost per hour for engine A is $_____

D) What is the equivalent operating cost per hour for engine B is $_____

An airline is considering two types of engine systems for use in its planes. Each has the same life and the same maintenance and repair record. System A costs $100,000 and uses 42,000 gallons per 1,000 hours of operation at the average load encountered in passenger service System B costs $240,000 and uses 25,000 gallons per 1,000 hours of operation at the same level Both engine systems have three-year lives before any major overhaul is required. On the basis of the initial investment, the systems have 8% salvage values lfjet fuel costs $2.13 a gallon (year 1 and fuel consumption is expected to increase at the rate of 7% per year because of degrading engine efficiency, which engine system should the firm install? Assume 2,000 hours of operation per year and a MARR of 10%. Use the AE criterion. What is the equivalent operating cost per hour for each engine? Assume an end-of-year convention for the fuel cost. Click the icon to view the interest factors for discrete compounding when MARR-10% per year 158 i, 0 6253 02 64467 5732 0876 07016 15432 10000 F 15998 9 9 34906 38371 WF 0 1233 44556 02158 06253 07016 04321 10000 5732 0876 11000 00001 i, 0 0 0 15 00140 01361 2 597 459 Fa 12346 79111 79135 52515 45 2 2 9613 8766 The WF DI 0 0 0 0 0 00000 gntrN. 0 0 0 15 67697 373 459 9135 0 013 11222 N12345 6789 10