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A copper wire has a material cost that varies proportionally with the cross-sectional area (A) according to the expression $40,000*A. This wire has a lifetime
A copper wire has a material cost that varies proportionally with the cross-sectional area (A) according to the expression $40,000*A. This wire has a lifetime of 30 years and a salvage value of $1500*A at that time. As the cross-sectional area of the wire increases, the resistance of the wire decreases such that the energy losses in the wire also decrease. The costs of these energy losses vary indirectly with the cross-sectional area according to the expression $70,000/A. Assuming an interest of 9%, what is the optimal value for this cross-sectional area? (Chapter 6- Annual Equivalent Worth Analysis)
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