6-58. A pump for a reservoir must be operated continuously (8,760 hours per year). In the event of a large storm, the electricity from the local utility’s power grid may be interrupted for an indefinite period of time. To deal with this emergency situation, two mutually exclusive backup diesel generators are being investigated.

One of them will be chosen for implementation. Relevant data are provided as follows:

Generator A Generator B Initial investment $100,000 $130,000 Annual operating and maint. 9,500 8,000 Useful life, years 15 20 If salvage values of both generators are negligible and the study period is 60 years, which generator should be chosen? The MARR is 10% per year. (6.5)