An electric cooperative's power generation costs $3.20/kWh. Data for two 50-horsepower motors are as shown below. If the interest rate is 20%, determine how many hours should the motors be operated at full load for them to be economical. If the number of hours exceeds the breakeven point, which of the two motors is more economical?

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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An electric cooperative's power generation costs $3.20/kWh. Data for two 50-horsepower motors are as shown below. If the interest rate is 20%, determine how many hours should the motors be operated at full load for them to be economical. If the number of hours exceeds the breakeven point, which of the two motors is more economical?

 

Motor A
Motor B
Initial cost
P45,000
P33,000
Annual maintenance cost
P1,200
P800
Annual operations cost
P11,000
P13,500
Efficiency
93%
89%
Taxes and Insurance
5%
8%
Economic life
10 years
10 years
Transcribed Image Text:Motor A Motor B Initial cost P45,000 P33,000 Annual maintenance cost P1,200 P800 Annual operations cost P11,000 P13,500 Efficiency 93% 89% Taxes and Insurance 5% 8% Economic life 10 years 10 years
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