Question
5. The National Park Service is considering two plans for rejuvenating the forest and landscape of a large tract of public land. The study period
5. The National Park Service is considering two plans for rejuvenating the forest and landscape of a large tract of public land. The study period is indefinitely long, and the Park Services MARR is 10% per year. You have been asked to compare the two plans over infinite lifetime. Using capitalized cost method, which plan would you recommend? (10 points) The first plan (Skyline) calls for an initial investment of $500,000, with expenses of $20,000 per year for the first 20 years and $30,000 per year thereafter. Skyline also requires an expenditure of $200,000 twenty years after the initial investment, and this will repeat every 20 years thereafter. 1 The second plan (PrairieView) has an initial investment of $700,000 followed by a single (onetime) investment of $300,000 thirty years later. PrairieView will incur annual expenses of $10,000 forever.
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