Question
There are two electric motors that can provide 100 hp. Alpha motor can be purchased at $1,500 and has an efficiency of 100%, an estimated
There are two electric motors that can provide 100 hp. Alpha motor can be purchased at $1,500 and has an efficiency of 100%, an estimated life of 12 years, and estimated maintenance costs of $50/year. Beta Motor will cost $1,200 and has an efficiency of 90%, life of 10 years and maintenance cost of $25/year. Assume that the company internal rate of return is 18%. Perform a Break even analysis to find out at what hours of operations the two motor costs are the same. Assume an electricity rate of $0.04 per kilowatt hour. Please plot your results.
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