Electrical company audit indicates that motor consumption, Macroeconomics

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An electrical company audit indicates that motor consumption is 4x106 kWh per year. By upgrading to high efficiency motors a 10% savings can be made. The additional cost for the motors is $80,000. Assuming a $0.08/kWh of energy and 20-year life, will this purchase pay off with a rate of return of 20%? Do the analysis by present worth, annual cost, and rate of return methods.


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