An area can be irrigated by pumping water from a nearby river. Two competing installations are being considered.

The MARR is 12% per year and electric power for the pumps cost $0.06 per kWh. Recall that 1 horsepower (hp) equals 0.746 kilowatts.

i) At what level of operation (hours per year) would you be indifferent between the two pumping systems?

ii) If the pumping system is expected to operate 2,000 hours per year, which system should be recommended?

Operating load on motor Efficiency of pump motor Cost of installation Market value Useful life Pump A Pump B 6 in. System 8 in. System 15 hp 0.60 $2,410 $80 8 years 10 hp 0.75 $4,820 $0 8 years