Reference no: EM132484419

You are a member of an engineering project team that is designing a new processing facility. Your present design task involves the portion of the catalytic system that requires pumping a hydrocarbon slurry that is corrosive and contains abrasive particles. For Final analysis and comparison, you have selected two fully lined slurry pump units, of equal output capacity, from different manufacturers. Each unit has a larger-diameter impeller required and an integrated electric motor with solid-state controls. Both units will provide the same level of service to the catalytic system but have different useful lives and costs.

                                                     SP240                                          HEPS9

Capital Investment                     $33,200                            $47,600

Annual Expenses:

Electrical Energy                       $2,165                              $1,720

Maintenance                           $1,100 in year 1                 $500 in year 4, and

and increasing increasing             $100/year                   $500/yr thereafter thereafter

Question 1: Calculate the capital investment amount for pump SP240 such that the firm would be indifferent as to which pump model is selected?