Question: A problem often discussed in the engineering economy literature is the "oil-well pump problem." Pump 1 is a small pump; Pump 2 is a larger pump that costs more, will produce slightly more oil, and will produce it more rapidly. If the MARR is 20%, which pump should be selected? Assume that any temporary external investment of money earns 10% per year and that any temporary financing is done at 6%.
![58_Pump.png](https://secure.tutorsglobe.com/CMSImages/58_Pump.png)