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A diesel generator is needed to provide auxiliary power in the event that the primary source of power is interrupted. Various generator designs are available,

A diesel generator is needed to provide auxiliary power in the event that the primary source of power is interrupted. Various generator designs are available, and more expensive generators tend to have higher reliabilities should they be called on to produce power. Estimates of reliabilities, capital investment costs, operating and maintenance expenses, market value, and the damages resulting from a complete power failure are given in the table below. If the life of each generator is 10 years and the MARR is 10% per year, what is the total annual cost of alternative S if you assume three main power failures per year?

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a.

-$77,500

b.

-$86,522

c.

-$98,066

d.

-$108,660

e.

-$94,082

of Po Reliability Cost of Power Failure MV Capital Expenses per AeacaeinalExpes Iternative elavestment Expenses per Reliability Cost year S200,000 70,000 214,000 S5,000 8,000 4,000 0.96 0.95 0.98 S400,000 400,000 400,000 S40,000 38,000

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