5-6: A large induced-draft fan is needed for and upgraded industrial priocess. T

Question

5-6: A large induced-draft fan is needed for and upgraded industrial priocess. The motor to drive this fan is rated at 100 horsepower, and the motor will operate at full load for 8760 hours per year. The motor's efficiency is 92%. Because the motor is fairly large, a demand chage for $92 per kilowatt per year will be incurred ina ddtion to an energy chage of $0.08 per kilowatt hour. If the installed cost fo teh motor us $4,000, what is the present worth of the motor over a 10-year period when MARR is 15% per year?

Explanation / Answer

Answer:

Annual Electricity Cost = (horse power * 0.746 * Hrs per year * Electricity Cost) / Motor Efficiency

                                   = (100 hp * 0.746 kW/hp * 8760 * $0.08)/0.92 = $56,825.74

Present value of annual outflows for 10 years = Annual Electricity Cost*Present Value Annuity Factor @15% for 10 years

                                                                 = $56,825.74* 5.0188 = $285,197

So the present worth of the motor = Initial Outflow + Present value of annual outflows for 10 years

                                                 = $4,000+$285,197 = $289,197 (Ans)

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.