A major manufacturer of home and office air conditioners uses a ½ hp, single-phase induction motor that has an efficiency of 72% at its average power output level. Several large volume customers indicated that they would be willing to pay a larger initial investment in air conditioners if they could recover this increased investment during the warranty period, which is 2 years. The typical office air conditioner in which they are interested runs approximately 8 hours per day during 260 working days of a calendar year. The motor supplied to the manufacturer has a wholesale cost of RM200. If the motor supplier would achieve an average efficiency of 85% by improving materials and design, how much cost differential could be added to the wholesale motor cost and still satisfy the customer’s request?
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