A replacement electric motor is being considered for purchase. It is capable ofproviding 200.00 hp. The pertinent data are as follows:Cost$5,782.91Maintenance cost per year180.31Useful Life14 yearsSalvage value$2.268.56The motor is used for 400 hours/year and the cost of electricity is $0.06/kW"h (1 hp- 0.746 kW). What is most nearly the effective annual cost using an interest rate of10%?

Given, Initial Cost : $ 5,728.91 Maintenance Cost : $180.31 Useful Life : 14 Years Salvage Value :…

Answered: A replacement electric motor is being…

A replacement electric motor is being considered for purchase. It is capable of providing 200.00 hp. The pertinent data are as follows:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A replacement electric motor is being considered for purchase. It is capable of
providing 200.00 hp. The pertinent data are as follows:
Cost
$5,782.91
Maintenance cost per year
180.31
Useful Life
14 years
Salvage value
$2.268.56
The motor is used for 400 hours/year and the cost of electricity is $0.06/kW"h (1 hp
- 0.746 kW). What is most nearly the effective annual cost using an interest rate of
10%?

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