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Please answer the question with a cash flow diagram. A company has a need for compressed air in one of its factory operations. A compressor
Please answer the question with a cash flow diagram.
A company has a need for compressed air in one of its factory operations. A compressor has been selected for this task. The company is now considering three options to drive the compressor. These options are (1) a gasoline engine, (2) a diesel engine, and (3) an electric motor. The required input to the compressor is 400 hp, and the compressor must operate 8 h/day for 270 days each year. The economic and operating data of the engines and motor are shown in Table P2.13. Any of the three options is expected to have a 15-year life. If the interest rate is 18%, determine which option should be selected. Compressor Drive Cost DataStep by Step Solution
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