What is the basic trade-off being made in this problem

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Reference no: EM131506079

Question: Two electric motors are being considered to drive a centrifugal pump. One of the motors must be selected. Each motor is capable of delivering 60 horsepower (output) to the pumping operation. It is expected that the motors will be in use 800 hours per year. The following data are available:
                              Motor A Motor B
Capital investment    $1,200 $1,000
Electrical efficiency        0.92 0.80
Annual maintenance    $160 $100
Useful life 3 years    6 years

a. If electricity costs $0.07 per kilowatt-hour, which motor should be selected if the MARR is 8% per year? Recall that 1 hp = 0.746 kW. Assume repeatability.

b. What is the basic trade-off being made in this problem?

Reference no: EM131506079

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