Question
In marble block quarrying operation, hand rock drills, costing P350,000 each, are used. It has a drilling rate of 10 cm/min, produces 10 cubic meters
In marble block quarrying operation, hand rock drills, costing P350,000 each, are used. It has a drilling rate of 10 cm/min, produces 10 cubic meters of block per month, and consumes 60 liters of diesel fuel for compressor drive, per rock drill per cubic meter produced utilizing 1 worker per drill.
A modern equipment quarry bar-mounted rock drill is being offered for P1,500,000 per unit and has a drilling rate of 60 cm/min that will produce 60 cubic meters of block per month, but consumes 120 liters of diesel fuel for the compressor drive, per 6 cubic meters of block produced, utilizing 2 workers per quarry bar drill.
Consider diesel fuel at P30/liter at the quarries, worker earning P500/day, 25 days per month, 5 years life of both drills with 20% salvage value, neglecting the cost of money, other costs at P500/cubic meter and marble blocks sold at P4,500/cubic meter.
Compare the payback period of the two alternatives and what is the payback period of the alternative with the shorter period. Express your answer in months.
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