Annual equivalent life-cycle cost of the gas turbine

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A 50-kilowatt gas turbine has in investment cost of $40,000. It costs another $14,000 for shipping, insurance, site preparation, fuel lines, and fuel storage tanks. The operation and maintenance expense for this turbine is $450 per year. Additionally, the hourly fuel for running is $7.50 per hour, and the turbine is expected to operate 3000 hours each year. The cost of dismantling and disposing of the turbine at the end of its 8-year life is $8000. If the MARR is 15% per year, what is the annual equivalent life-cycle cost of the gas turbine?

Reference no: EM13740818

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