Question

Two pumps are being considered for an industrial application. The selected pump will be used for one

year and will have no salvage value at the end.

The Marvelous Pump Co. has a 125 hp pump. Its purchase price is $3200 and it costs $170 per year to

maintain. The other unit comes from Mack’s Super Pumps. It’s rated at 110 hp, costs $6800 to buy and $510 per year for maintenance. The salesman from the Marvelous Company always jokes that Mack should be called Mack’s Super Price. He’s putting the hard sell on you to buy his pump. He knows that you are budget conscious and he is touting his pump’s superior power at a much lower price. Either pump will meet your needs. The chosen pump will be operated for 4000 hours during the year

and electricity costs $0.11 per kWh (1 hp = 0.746 kW).

Which pump should be chosen?

Answer 1