Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 20% and the following cost estimates: Please Show your work Description Service life First cost Alt1 (Alpha) Alt2. (Beta) 7 11 $12,000 $22,000 0 $7,000 Annual operating cost $2,500 $1,200 Salvage value (a) Compute the equivalent annual costs of each alternative and recommend the economically superior alternative. (b) Determine a salvage value for the Beta system such that the Beta system will have an equivalent uniform annual cost equal to the Alpha system.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Two types
of
power converters are under consideration for a specific application. An
economic comparison is to be made using a MARR of 20% and the following cost
estimates: Please Show your work
Description
Service life
First cost
Alt1 (Alpha)
Alt2. (Beta)
7
11
$12,000
$22,000
0
$7,000
Annual operating cost
$2,500
$1,200
Salvage value
(a) Compute the equivalent annual costs of each alternative and recommend the
economically superior alternative.
(b) Determine a salvage value for the Beta system such that the Beta system will have an
equivalent uniform annual cost equal to the Alpha system.
Transcribed Image Text:Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 20% and the following cost estimates: Please Show your work Description Service life First cost Alt1 (Alpha) Alt2. (Beta) 7 11 $12,000 $22,000 0 $7,000 Annual operating cost $2,500 $1,200 Salvage value (a) Compute the equivalent annual costs of each alternative and recommend the economically superior alternative. (b) Determine a salvage value for the Beta system such that the Beta system will have an equivalent uniform annual cost equal to the Alpha system.
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