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The production manager of a manufacturing plant figured that by installing four 15-KVAR power condensers the power factor will increase by 20%, resulting in a
The production manager of a manufacturing plant figured that by installing four 15-KVAR power condensers the power factor will increase by 20%, resulting in a monthly power savings of P7,700.00. Each unit costs P75,000.00 with a 10% salvage value after 10 years. The overall cost of installation is P14,000.00, and the estimated annual cost of maintenance and taxes is P11,800.00. If a 9% sinking fund formula is applied for depreciation, determine the payback period for the condensers.
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