ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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An agricultural land requires a 20PK motor to pump water from a water sources. The number of operating hours (motor hours) each year depends on height rainfall, so the hours of operation are variable. The motor is used in the long term 4 years time. There are 2 alternatives proposed for the procurement of these motors:
Alternative A:
The cost of buying an automatic electric motorbike is Rp. 1,400 million with a final value of Rp. 200 million With a lifespan of 4 years. Operational costs of Rp. 840k per hour, and maintenance fee of Rp. 120 million per year.
Alternative B :
The cost of purchasing a gasoline motorbike is Rp. 550 million with a final value of zero. With age used for 4 years.
Operational costs consist of:
• Gasoline costs Rp. 420k per hour
• Maintenance fee of Rp. 150k per hour
• Operator fee Rp. 800k per hour
Question :
Determine in how many hours each year the two motors must operate, in order to cost the two alternatives are equal. Use MARR 10% per year. When used during 1,000 hours, which one is more economical? Is it an electric motor or a gasoline motor? give the explanation.
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