A company has a need for compressed air in one of its factory operations. A compressor has been selected for this task. The company is now considering three options to drive the compressor. These options are

(a) a gasoline engine,

(b) a diesel engine, and

(c) an electric motor. The required input to the compressor is 100 hp and the compressor must operate 8 hours/day for 230 days each year. The economic and operating data of the engines and motor are shown in Table P2.28.
If the MARR is 18%, determine which option should be selected.

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TABLE P2.28 Compressor Drive Cost Data Parameter Initial cost Expected life Salvage value Annual maintenance cost Fuel consumption Fuel cost Fuel density Parameter Initial cost Expected life Salvage value Annual maintenance cost Motor efficiency Electricity cost* Gasoline Engine $9,000 12 yr $3,200 $1,400 0.48 lbm/hp-h x, $/gal 43.7 lbm/ft Electric Motor $10,400 22 yr $2,400 $1,900 91% x, $/kWh Diesel Engine $16,000 18 yr $5,800 $2,300 0.38 lbm/hp-h x$/gal 46.7 lbm/ft