8. (5') Which is a better choice at an interest rate of 6%? Assume the pipeline will be replaced every 30 years. (A/P, 6%, 30)=0.0726 the Better Choice Is the Tunnel due to being permanent Useful ife being per every 30 years. Tunnel Initial cost Maintenance Useful life $3 million Pipeline $2 million 0 0 Permanent 30 years Salvage value 0 0 whereas pipeline would need to be changed 9. (5') Buy or lease options (for 2 years): Buy for $25,000 with salvage value of $5500; or Lease at $1800/month What is IRR of lease? Use factor form to give an equation to calculate IRR. NPV ease NPK way -1800 = -25,000 (PIF, buy, 2) + 5500 => ikay % 29 9 lease = (1 + iky)= % X 10.(5') In this problem MARR=12%. If you can choose at most one alternative one time, using the IRR analysis method, which one would you select? Alt.1 -$1500 Year 0 Alt.2 -$2500 1 + 1800 + 2900 A. 2 Douid sexe spect