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In: Economics

A​ 50-kilowatt gas turbine has an investment cost of $44,000. It costs another $13,000 for​ shipping,...

A​ 50-kilowatt gas turbine has an investment cost of $44,000. It costs another $13,000 for​ shipping, insurance, site​ preparation, fuel​ lines, and fuel storage tanks. The operation and maintenance expense for this turbine is ​$450 per year.​ Additionally, the hourly fuel expense for running the turbine is ​$7.75 per​ hour, and the turbine is expected to operate 3,400 hours each year. The cost of dismantling and disposing of the turbine at the end of its 9​-year life is ​$8,000.

a. If the MARR is 13​% per​ year, what is the annual equivalent​ life-cycle cost of the gas​ turbine?

b. What percent of annual​ life-cycle cost is related to​ fuel?

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