Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 28

The estimated cost of a completely installed and ready-to-operate 40-kilowatt generator is $32,000. Its annual maintenance costs are estimated at $800. The energy that can be generated annually at full load is estimated to be 100,000 kilowatt-hours. If the value of the energy generated is $0.09 per kilowatt-hour, how long will it take before this machine becomes profitable Take the MARR to be 10% and the salvage value of the machine to be $2,000 at the end of its estimated life of 15 years.