A piece of equipment costs $250,000 to buy and install. The annual operating cost for the equipment is
$50,000 per year. The equipment will last 15 years. After 15 years, the equipment will have no net salvage
value. The annual interest rate is 10%. What is the present value of the life-cycle cost to own and operate the
equipment? Use end-of-year annual cash flow analysis.
A 55-kW motor at full load is used to drive a pump that generates 50 meters of head while pumping water at a
rate of 5,000 liters per minute. Calculate the pump efficiency.
A new lighting system costs $60,000. The new lighting system has a 15-year life and the minimum required
rate of return (MARR) is 15%. How much must the new lighting system save to be life-cycle cost effective?