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individual industries will use energy as efficiently as it is economical to do so, and there are several incentives to improve the efficiency of energy
individual industries will use energy as efficiently as it is economical to do so, and there are several incentives to improve the efficiency of energy consumption. To illustrate, consider the selection of a new water pump. The pump is to operate 800 hours per year. Pump a cost $1900, has an overall efficiency of 81.2% and it delivers 10.6 hp. The other available alternative, pump B, cost $900, has an overall efficiency of 44.45% and delivers 12.4 hp. Both pumps have a useful life of five years and will be sold at that time. (Remember one horse power equals .746 kW) pump a will use SL depreciation over five years with an estimated SV of zero. pump be will use the MACRS depreciation method with a class life of three years. After five years, Pompei has an actual market value of $400, and pump be has an actual market value of $220. Using the IRR method on the after-tax cash flows and a before tax MARR of 15%, is the incremental investment in pump a economically justifiable? The effective income tax rate is 23%. The cost of electricity is four cents per kilowatt hour, and the pumps are subject to a study period of 5 years. I did not realize the original picture was blurry till after it was uploaded. Use the typed information please, it has all the information from the problem. the problem is asking to compute the IRR between pump A and B. all the information provided is typed above. Score: 0 of 1 pt 4 of 4 (3compete) HW Score: 75%, 3 of 4 pts Problem 7-40 (algorithmic) Queston ep nts. Indvdal ndes wll useanegy as officiently an tsoomcal to de so and there are several incerties to mprove the efficency of eney comnton To a coder te se of a ewwa pump The pump is to oper 800 hours per year Punp A costs $1,900 has an overall officency of 81 2% and delivers 106 h The other available atemat pp ,cos $00, has an oveal effeey of 445% and delivers 12 4 hp Both puns hvea e of e pars and we he0746 kW PumpAwill ne t depreciation over fe years with an estmated SV of ze Pump B wl use the MACRS depreciation methad with a class e of tee years Aer e years, pumpA has an achlaket sae of $400, and pump B h an acal maket vale of 5220 Using the R mthod on he aer tax cash fows and a before t MAR of 15% is the incremental investtinp Aconomcally tfble? The offecive ineome tax e is 23% The cost of electicty 04 e years Click the ieon to view the GOS Recovery Raes )fr the 3-year property class asold at that se emenber 1 d the pmps ane sbyect to a study period of Tools The R of the nemental iesent is 19%Round to one decmal place) individual industries will use energy as efficiently as it is economical to do so, and there are several incentives to improve the efficiency of energy consumption. To illustrate, consider the selection of a new water pump The pump is to operate 800 hours per year. Pump a cost $1900, has an overall efficiency of 81.2% and it delivers 10.6 hp. The other available alternative, pump B, cost $900, has an overall efficiency of 44.45% and delivers 12.4 hp. Both pumps have a useful life of five years and will be sold at that time. (Remember one horse power equals .746 kW) pump a will use SL depreciation over five years with an estimated SV of zero. pump be will use the MACRS depreciation method witha class life of three years. After five years, Pompei has an actual market value of $400, and pump be has an actual market value of $220. Using the IRR method on the after-tax cash flows and a before tax MARR of 15%, is the incremental investment in pump a economically justifiable? The effective income tax rate is 23%. The cost of electricity is four cents per kilowatt hour, and the pumps are subject to a study period of 5 years
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