Is considering two different pumps. Which of pumps should they purchase? The data on the pumps is given in the following Table. Minimum attractive interest rate is 15%. You can use net present worth (cost) criteria with common multiple life which is 6. Do before tax analysis which means do not account for tax and depreciation. Operating Cost (S/year) 50,000 40,000 TCI ($) Pump Alternatives Life of alternatives (years) 100,000 150,000 23

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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In a large plant that has life of 12 years, the management is considering two different pumps.
Which of pumps should they purchase? The data on the pumps is given in the following Table.
Minimum attractive interest rate is 15%. You can use net present worth (cost) criteria with
common multiple life which is 6.
Do before tax analysis which means do not account for tax and depreciation.
Operating Cost
(S/year)
50,000
40,000
Pump
Alternatives
TCI ($)
Life of alternatives
(years)
100,000
150,000
3
Transcribed Image Text:In a large plant that has life of 12 years, the management is considering two different pumps. Which of pumps should they purchase? The data on the pumps is given in the following Table. Minimum attractive interest rate is 15%. You can use net present worth (cost) criteria with common multiple life which is 6. Do before tax analysis which means do not account for tax and depreciation. Operating Cost (S/year) 50,000 40,000 Pump Alternatives TCI ($) Life of alternatives (years) 100,000 150,000 3
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