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A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a power line is
A pump is needed for 10 years at a remote location. The pump can be driven by an electric motor if a power line is extended to the site. Otherwise, a gasoline engine will be used. Use an annual cash flow analysis and a 6% interest rate. How should the pump be powered? Gasoline Electric First cost $2400 $9000 Annual operating cost1200 250 |Annual maintenance 1300 50 Salvage value 300 600 Life, in years 5 10 A firm is choosing between machines that perform the same task in the same time. Assume the minimum attractive return is 7%. Which machine would you choose
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