Question
After the latest retrenchments UTTs President plans to use the Aranguez university press to print abundant MAGA (make Aranguez great again) flyers to boost morale.
After the latest retrenchments UTTs President plans to use the Aranguez university press to print abundant MAGA (make Aranguez great again) flyers to boost morale. UTT has to replace the broken steam press with an electric one though, and is evaluating two brands, StuartY and Krowley, with identical power output but different running costs.
StuartY costs $7.50, Krowley costs $7 and they both have 1 kW power output, but StuartY operates at 90% efficiency, and Krowley at 86% efficiency. UTT estimates annual operating and maintenance costs (not including electricity use) to be 12% of the initial purchase price for each brand. UTT uses a 15% MARR to evaluate the purchase and 8-year expected equipment life, with salvage values for each option of 20% of the initial purchase price. If power in Aranguez costs $0.10 per kWh, how many hours of operation per annum are necessary to justify buying StuartY instead of Krowley?
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