Assignment:
Can you help me get started with this assignment?
As a result of design changes, a pump which is rated at 100 KW with an overall efficiency of 80% is now too large for the service.
If you continue to run this pump, the overall efficiency will only be 75%.
To restore the efficiency to 80% you can buy a new impeller for $1500. Would it be economical to purchase a new impeller if the minimum attractive rate of return is 12% and the expected life of the impeller is 5 years?
It will cost $500 to install the new impeller and the cost of energy is 2 cents per KWh.
Assume continuous operation. Use equivalent annual costs.