Two possible routes for a power line are under study. Data on the routes are as follows.

Around the Lake Under the Lake Length 15 km 5 km First cost (7) 150,000 750,000 Useful life (Yrs.) 15 15 Maintenance cost (!) 6000 /km/Yr 12,000 /km/Yr Salvage value (7) 90,000 /km 150,000 /km Yearly power loss (7) 15,000 /km 15,000 /km If 15% interest is used, should the power line be routed around the lake or under the lake?

AppendixLO1