An area can be irrigated by pumping water from a nearby river. Two competing installations are being considered. The MARR is 12% per year. At what level of operation (hours per year) would you be indifferent between the two pumping systems?
The table below gives the different estimates needed to do the calculations:
Pump A Pump B
Initial cost $2,410 $4,820
Electrical efficiency 60% 75%
Salvage value $120 $40
Operating load on motor 20 hp 12 hp
Electrical power costs (1hp = 0.746kW) 0.05/kwh 0.05/kwh