Question: Problem 5 (6-45) A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a

 Problem 5 (6-45) A pump is needed for 10 years at

Problem 5 (6-45) A pump is needed for 10 years at a remote location. 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. Gasoline $2400 1200 Electric $6000 750 50 First cost At the rate of return of 10%, conduct economic analysis with the two methods below and make recommendation on how the pump should be powered. Annual operating cost Annual maintenance Salvage value Life, in years 300 10 (a) Present worth analysis (10 pts) (b) Annual Cash flow Method (10 pts) ANALYSIS

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