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A contractor is offered his choice of either gasoline, diesel or butane engine to power a bulldozer he is to purchase. The gasoline engine will
A contractor is offered his choice of either gasoline, diesel or butane engine to power a bulldozer he is to purchase. The gasoline engine will cost Rs. 3,00,000 and will have an estimated maintenance cost of Rs. 30,000 per year and will consume Rs. 540 worth of fuel per hour of operations. The diesel engine will cost Rs.4,20,000 and will cost an estimated Rs.36,000 per year to maintain and will consume Rs. 495 worth of fuel per hour. The butane engine will cost Rs.4,95,000 and will cost Rs. 47,250 per year to maintain and will consume 435 worth of fuel per hour of operation. Since the salvage value of the engine is identical it can be neglected. All other costs associated with the three engines are equal and the interest rate is 11%. The service life of each engine is 6 years. Plot the total annual cost of each engine as a function of no. of hours of operation/year. Find the range of no. of hours of operation for which it would be most identical to specify the gasoline, diesel and butane engines
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