Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 25

An airline is considering two types of engine systems for use in its planes. Each has the same life and the same maintenance and repair record.
• System A costs $100,000 and uses 40,000 gallons per 1,000 hours of operation at the average load encountered in passenger service.
• System B costs $200,000 and uses 32,000 gallons per 1,000 hours of operation at the same level.
Both engine systems have three-year lives before any major overhaul is required. On the basis of the initial investment, the systems have 10% salvage values. If jet fuel currently costs $2.10 a gallon and fuel consumption is expected to increase at the rate of 6% per year because of degrading engine efficiency, which engine system should the firm install Assume 2,000 hours of operation per year and an MARR of 10%. Use the AE criterion. What is the equivalent operating cost per hour for each engine