Are you smarter than a freshman?

The Question: You’re in charge of a manufacturing facility and are considering upgrading a certain piece of equipment. The equipment normally operates with a power input of 100 horsepower (hp). An upgrade of the equipment would allow it to operate with a power input of 90 hp. The savings from this conversion would amount to $4,000 per year. What is the price of electricity for your facility in cents per kW∙hour?

The Answer: The given information tells us that $4,000 per year can be saved per 10 hp. In other words: $4,000/(10 hp∙year). This has the same dimensions as the desired answer: money per (power∙time). Simple unit conversions such as 1.341 x 10-3 hp equals 1 Watt & assuming 24 hour operation for 350 days per year allows us to estimate the price of electricity as 6.4 cents per kW-hour.

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