Here's the thing, and why I use my equation. If a car rated SAE at 400hp comes in and makes 340rwhp then you are correct, and using the 340/(1-.15) method works great. However the average hp for a car rated at 400 is usually around 348 or so (keep in mind, I'm just using this as an example). Now if we use your method then the car is making 409hp at the flywheel, which may or my not be wrong, who knows. Now, about 99% of my clients have the 15% number drilled into their head. The actual drive train loss might actually be around 13%. In this case, your formula works. The problem is that the clients want to use the 15% number for whatever reason, and from a business standpoint it makes more sense for me to use my method. If I use X/(1-.15) then the tag starts floating around the the dyno is "generous" and bloats numbers. If I use the 15% loss variable that the client wants to use then I have to do it my way...from a business standpoint, so that is the real reason behind my method. Does that make sense?
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