You are considering buying a 30-HP electric motor which has an efficiency rating of 89%. The motor costs $10,000 and will be used for 10 years. The expected salvage value at that time is $1,000. The cost to run the electric motor is $0.09 per kWh for 2,000 hours a year. (1HP=0.7457kW.)(1 HP=0.7457 kW.) What is the total annual equivalent cost of owning and operating the motor for 10 years at an interest rate of 12% per year?

You are considering buying a 30-HP electric motor which has an efficiency rating of 89%. The motor costs $10,000 and will be used for 10 years. The expected salvage value at that time is $1,000. The cost to run the electric motor is $0.09 per kWh for 2,000 hours a year. (1HP=0.7457kW.)(1 HP=0.7457 kW.) What is the total annual equivalent cost of owning and operating the motor for 10 years at an interest rate of 12% per year?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.4: Marketing Models

Problem 33P

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