Which the two systems will break even

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Reference no: EM13946977

A certain area can be irrigated by piping water from a nearby river. Two competing installations are being considered, for which the following engineering and cost data apply :

6-inch System 8-inch System

Size motor required 25 hp 10 hp

Energy cost per hour of operation $ 1.25 $ 0.55

Cost of motor installed $ 800 $ 500

Cost of pipe and fittings $ 2,900 $ 3,700

Salvage value at end of 10 years $ 360 $ 280

On the basis of a 10-year life with an interest rate of 12%, determine the number of hours of operation per year for which the two systems will break even.

Reference no: EM13946977

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