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In: Economics

A special-purpose 30-horsepower electric motor has an efficiency of 90 %. Its purchase and installation price...

A special-purpose 30-horsepower electric motor has an efficiency of 90 %. Its purchase and installation price is $2 200. A second 30-horsepower high-efficiency motor can be purchased for $3 200 , and its efficiency is 93 %. Either motor will be operated 4 000 hours per year at full load, and electricity costs $0.10 per kilowatt-hour (kWh). MARRequals15 % per year, and neither motor will have a market value at the end of the eight-year study period. Most motors are operated at a fraction of their rated capacity (i.e., full load) in industrial applications. Suppose the average usage (load factor) of motors is expected to be 60 %. Which motor should be recommended under this condition?

The PW of the motor with the efficiency of

9090 %

is _.

(Round to the nearest dollar.)

The PW of the motor with the efficiency of

9393 %

is_.

(Round to the nearest dollar.)

Which motor should be chosen? Choose the correct answer below.

9393 %

efficiency motor

9090 %

efficiency motor

Solutions

Expert Solution

The PW of the motor with the efficiency of 9090 %.

Purchase and installation price is $2 200

MARR equals15 % per year

Operated 4 000 hours per year at full load, and electricity costs $0.10 per kilowatt-hour (kWh)

Operating cost for 100% Capacity = 4000*.10 = 400

Suppose the average usage (load factor) of motors is expected to be 60 %

In the above case Operating cost will be 60% of 400 = 240

Eight-year study period

NPW = 2200 + 240 (P/A, 15%, 8)

NPW = 2200 + 240 (4.4873) = 3,277

The PW of the motor with the efficiency of 9393 %

Purchase and installation price is $3 200

MARR equals15 % per year

Operated 4 000 hours per year at full load, and electricity costs $0.10 per kilowatt-hour (kWh)

Operating cost for 100% Capacity = 4000*.10 = 400

Suppose the average usage (load factor) of motors is expected to be 60 %

In the above case Operating cost will be 60% of 400 = 240

Eight-year study period

NPW = 3200 + 240 (P/A, 15%, 8)

NPW = 3200 + 240 (4.4873) = 4,277

Which motor should be chosen?

9090 % efficiency motor should be selected because of less cost.

Rahul Sunny answered 2 years ago
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