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6-32 Two possible routes for a power line are under study. Data on the routes are as follows: Around Under the Lake the Lake Length
6-32 Two possible routes for a power line are under study. Data on the routes are as follows: Around Under the Lake the Lake Length 15 km 5 km First cost $5000/km $25,000/km Maintenance $200/km/yr $400/km/yr Useful life, in years 15 Salvage value $3000/km $5000/km Yearly power loss $500/km $500/km Annual property taxes 2% of first cost 2% of first cost 15 If 7% interest is used, should the power line be routed around the lake or under the lake? (Answer: Around the lake.)
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