Two 70 horsepower motors are being considered for use. If power costs ​$0.18 per​ kWh, and if the interest rate is 15​%, how many hours of operation per year is required to justify the purchase of XYZ brand​ motor? (1 HP=0.746 kW) Which motor would you select if the motor is expected to operate 2500 hours per​ year?

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.1MBA
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Two 70 horsepower motors are being considered for use. If power costs ​$0.18 per​ kWh, and if the interest rate is 15​%, how many hours of operation per year is required to justify the purchase of XYZ brand​ motor? (1 HP=0.746 kW) Which motor would you select if the motor is expected to operate 2500 hours per​ year?
 
 
Let X = operating hours per year.
 
Questions;
 
a. The annual energy cost of electrical power for Motor ABC is ( .... × ​X).
​(Round to three decimal​ places.)
 
b. The annual energy cost of electrical power for Motor XYZ is $( .... ×​X).
​(Round to three decimal​ places.)
 
c. Minimum ..... hours of operation per year are required to justify the purchase of XYZ brand motor. ​(Round to the nearest whole​ number.)
 
More Info
- X
АВС Brand
2,100
10
XYZ Brand
5,600
Purchase Price $
Life in Years
10
Salvage Value $
Annual Maintenance $
Efficiency %
None
250
None
330
85
95
Print
Done
Transcribed Image Text:More Info - X АВС Brand 2,100 10 XYZ Brand 5,600 Purchase Price $ Life in Years 10 Salvage Value $ Annual Maintenance $ Efficiency % None 250 None 330 85 95 Print Done
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