It is necessary to pump twice as much water as can be handled by an existing...

80.2K

Verified Solution

Question

Civil Engineering

It is necessary to pump twice as muchwater as can be handled by an existing small pump, which is now 5years old. This pump can be sold now for $1200 or kept for 5 years,after which it will have zero salvage value. Operating expenses are$2500 per year.
If the pump is kept, a similar extraone must be purchased for $3500, with operating costs of $2000 peryear; its salvage values after 5 and 10 years are the same as forthe original (existing) pump.
A large pump, equal in capacity totwo of the smaller pumps, costs $6200, with operating expenses of$4200 per year.
New machines have economic lives of10 years with 1800 and zero salvage values at year 5 and year 10respectively. Determine the best course of action if the MARR is10%.

Answer & Explanation Solved by verified expert

4.1 Ratings (565 Votes)

In first case we need to install another pump to meet the demandand in Second case we are replacing the existing pump with a newlarge pump In first case Even though we install another pumphaving 10 years of economic life to meet the demad the existingpump has only 5 years of economic life See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member