Two possible routes for a power line are under study. Data on the routes are as shown in the following table: Option Information Around the Lake Under the Lake Length 15 km 5 km First Cost $5000 / km...


Two possible routes for a power line are under study. Data on the routes are as shown in the following table:















































Option



Information




Around the Lake




Under the Lake



Length



15 km



5 km



First Cost



$5000 / km



$25,000 /km



Maintenance cost



$200/km/yr



$400/km/yr



Useful Life (years)



15



20



Salvage Value



$3000/km



$5000/km



Yearly power loss



$500/km



$500/km



Annual Taxes



2% of the first cost



2% of the first cost



If MARR = 10%, which alternative should you select? Justify your answer.



Jun 10, 2022
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