solving step by step

solve the following and present the solution in structured manner

a. Payback period

b. Profitability index

c. Internal Rate of Return

d. Break-even Analysis (if applicable)

e. Depreciation schedules (use one method only)

f. PW, AW, or FW Analysis (use one method only)

(this is the question)

An engineer must choose between two pumps for use in a water distribution system. Both pump A and pump B will deliver water at an adequate flow rate and pressure head. The data for the two pumps are given below: Item Initial Cost (BD) Operating Cost per year (BD) Lifetime (years) Salvage Value (BD) Pump A 200,000 30,000 12 10,000 Pump B 300,000 23,000 12 60,000 If the interest rate is charge at 7%: a) which pump are you going to choose? b) If the lifetime of pump B is changed to 16 years, and the analysis period is 48 years, which pump is better