A certain area can be irrigated by piping water from a nearby river. Two competing installations are being considered, for which the following engineering and cost data apply :
6-inch System 8-inch System
Size motor required 25 hp 10 hp
Energy cost per hour of operation $ 1.25 $ 0.55
Cost of motor installed $ 800 $ 500
Cost of pipe and fittings $ 2,900 $ 3,700
Salvage value at end of 10 years $ 360 $ 280
On the basis of a 10-year life with an interest rate of 12%, determine the number of hours of operation per year for which the two systems will break even.