Question: I can't seem to get the right answer need help on my last attempt Individual industries will use energy as efficiently as it is econcenical

I can't seem to get the right answer need help on my last attempt
I can't seem to get the right answer need help on my
last attempt Individual industries will use energy as efficiently as it is

Individual industries will use energy as efficiently as it is econcenical to do so, and there are several incentives to impeove the efficiency of energy consumption. To illustrate, consider the selection of a new water pump. The pump is to operate 800 hours per year. Pump A costs $1,800, has an overal efficiency of 82.94%, and it delivers 11hp. The other available alternative, pump 8, costs $800, has an overall efficiency of 46.49%, and delivers 12.6 hp. Both pumps have a useful life of five years and will be sold at that time. (Remember 1hp=0.746kW.) Pump A will use SL depreciation over five years with an estimated SV of zero. Pump B will use the MACRS depreciation method with a dass life of three years. After five years, pump A has an actual market value of $410, and pung B has an actual market value of $220. Using the IRR method on the after-tax cash flows and a before-tax MARR of 15%, is the incremental investment in pump A economicaly kustifiable? The eflective income tax rate is 30%. The cost of electricity is 50.06/kW, and the pumps are subject to a study period of five years. Cir Click the icon to view the GDS Recovery Rates (rk) for the 3.year property dass. The IRR of the increnental investment is W. (Round to one decimal place.) More Info

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!