Two electric motors are being economically evaluated for use in a submersible robotic device. Each is capable of delivering 90 horsepower to a necessary application that the device performs. Data for the mutually exclusive motors are as follows.

The MARR is 12% per year. If the expected usage of the motor is 500 hours per year, what would the cost of electric power have to be before the Phillips motor is favored over the General Electric motor? Recall that 1 horsepower = 0.746 kilowatts. Choose the closest answer from those below.
(a) $0.02 per kWh
(b) $0.19 per kWh
(c) $0.09 per kWh
(d) $0.05 per kWh

Transcribed Image Text:

Motor General Electric Phillips $2,500 0.74 $400 10 Initial investment $3,200 0.89 $600 10 Electrical efficiency Annual maintenance Useful life (years)