Question
In: Economics
A manufacturing company is considering purchasing a 10 HP electric motor which it estimates will run...
A manufacturing company is considering purchasing a 10 HP electric motor which it estimates will run an average of 6 hours per day for 250 days per year. Past experience indicates that: (1) its annual cost for taxes and insurance averages 2.5% of first cost, (2) it must make 10% on invested capital before income tax considerations, and (3) it must recover capital invested in machinery within 5 years. Two motors are offered to the company. Motor A costs $ 340 and has a guaranteed efficiency of 85% at the indicated operating load. Motor B costs $290 and has a guaranteed efficiency of 80% at the same operating load. Electric energy costs the company 2.3 cents per KW-hr. Calculate the annual cost of each motor and indicate which motor should be purchased
Solutions
Rahul Sunny answered 7 months agoRelated Solutions
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year, and the cost of
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A standard electric motor is rated at 10 horsepower (HP) and costs $800. Its fullload efficiency...
A standard electric motor is rated at 10 horsepower (HP) and
costs $800. Its fullload
efficiency is specified to be 92%. A newly designed, high
efficiency motor of
the same size has an efficiency of 95%, but costs $1,200. It is
estimated that the
motors will operate at a rated 10-HP output for 2,000 hours a
year, and the cost of
energy will be $0.07 per kilowatt-hour. Each motor is expected
to have 12-year
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Suppose a company has a forklift but is considering purchasing a new electric lift truck that...
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company is considering buying a new high efficiency motor (91%
efficient) to replace the old one instead of buying a standard
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$70 more than the standard model, and should have a...
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