Two companies produce motors that are rated 50-hp and are presented as alternatives. Arrow Motors produces...

 

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Two companies produce motors that are rated 50-hp and are presented as alternatives. Arrow Motors produces this kind of motor at Php 37,500 and has a useful life of 10 years. Annually it will require maintenance and it will cost Php 1,500. The machine is assumed 87% efficient for the whole of its useful life. Taxes and insurance are at 3%. Bailey Motors produces this kind of motor at Php 48,000 and has a useful life of 10 years. Annually it will require maintenance and it will cost Php 750. The machine is assumed 87% efficient for the whole of its useful life. Taxes and insurance are at 3%. The cost of electricity is Php 2.00 per kWh. How many hours a year will the motors have to be run at full load to be similarly economical if money is worth 20%? Two companies produce motors that are rated 50-hp and are presented as alternatives. Arrow Motors produces this kind of motor at Php 37,500 and has a useful life of 10 years. Annually it will require maintenance and it will cost Php 1,500. The machine is assumed 87% efficient for the whole of its useful life. Taxes and insurance are at 3%. Bailey Motors produces this kind of motor at Php 48,000 and has a useful life of 10 years. Annually it will require maintenance and it will cost Php 750. The machine is assumed 87% efficient for the whole of its useful life. Taxes and insurance are at 3%. The cost of electricity is Php 2.00 per kWh. How many hours a year will the motors have to be run at full load to be similarly economical if money is worth 20%?

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Comparing Two 50hp Motor Options Analysis We need to compare the total present value PV of costs for ... View the full answer