Two traffic signal systems are being considered for an intersection. One system costs $34,000 for installation and has an efficiency rating of 75%, requires 30 kW power (output), incurs a user cost of $0.21 per vehicle, and has a life of 10 years. A second system costs $42,000 to install, has an efficiency rating of 88%, requires 32 kW power (output), has a user cost of $0.24 per vehicle, and has a life of 16 years. Annual maintenance costs are $80 and $95, respectively. MARR = 8% per rear. How many vehicles must use the intersection to justify the second system when electricity costs $0.08/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
Two traffic signal systems are being considered for an intersection. One system costs $34,000 for installation and has an efficiency rating of 75%, requires 30 kW power (output), incurs a user cost of $0.21 per vehicle, and has a life of 10 years. A second system costs $42,000 to install, has an efficiency rating of 88%, requires 32 kW power (output), has a user cost of $0.24 per vehicle, and has a life of 16 years. Annual maintenance costs are $80 and $95, respectively. MARR = 8% per rear. How many vehicles must use the intersection to justify the second system when electricity costs $0.08/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 20P: The Aubey Coffee Company is evaluating the within-plant distribution system for its new roasting,...
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