Question
A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $415,000 with annual operating and maintenance costs
A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $415,000 with annual operating and maintenance costs of $43,000 for the next 16 years; design B calls for an investment of $325,000 with annual operating and maintenance costs of
$93,000 per year for the next 16 years. Fee collections from the residents would again be $85,000
per year. The interest rate is 5%, and no salvage value is associated with either system.
(a) Using the benefitcost ratioBC(i),which system should be selected?
The PI(i)A-B is
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