An electrical utility is experiencing a sharp power demand that continues to grow at a high rate in a certain local area. Two alternatives are under consideration. Each is designed to provide enough capacity during the next 25 years, and both will consume the same amount of fuel, so fuel cost is not considered in the analysis. Alternative A. Increase the generating capacity now so that the ultimate demand can be met without additional expenditures later. An investment of $27 million would be required, and it is estimated that this plant facility would be in service for 25 years and have a salvage value of $1.0 million. The annual operating and maintenance costs (including income taxes) would be 50.3 million. Alternative B. Spend $11 million now and follow this expenditure with future additions during the 10th year and the 15th year. These additions would cost $15 million and $7 million, respectively. The facility would be sold 25 years from now with a salvage value of $1.25 million. The annual operating and maintenance costs (including income taxes) will be $350,000 initially and will increase to $0.45 million after the second addition (from the 11th year to the 15th year) and to $0.55 million during the final 10 years. (Assume that these costs begin one year subsequent to the actual addition.) On the basis of the present worth criterion, if the firm uses 10% as a MARR, which alternative should be undertaken? Note: Adopt incremental cost approach. Click the icon to view the interest factors for discrete compounding when i -10% per year. The present worth of Alternative Ais million (Round to one decimal place.) The present worth of Alternative Bis million (Round to one decimal place.) On the basis of the present worth criterion, which alternative should be undertaken? Choose the correct answer below. O O Alternative A Alternative B Single Payment Compound Present Amount Worth Factor Factor (F/P, I, N) (P/F, i, N) 1.1000 0.9091 1.2100 0.8264 1.3310 0.7513 1.4641 0.6830 1.6105 0.6209 Compound Amount Factor (F/A, i, N) 1.0000 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/F, i, N) (P/A, I, N) 1.0000 0.9091 0.4762 1.7355 0.3021 2.4869 0.2155 3.1699 0.1638 3.7908 Capital Recovery Factor (A/P, I, N) 1.1000 0.5762 0.4021 0.3155 0.2638 2.1000 3.3100 4.6410 6.1051 0.2296 0.2054 1.7716 1.9487 2.1436 2.3579 2.5937 0.5645 0.5132 0.4665 0.4241 0.3855 7.7156 9.4872 11.4359 13.5795 15.9374 0.1296 0.1054 0.0874 0.0736 0.0627 4.3553 4.8684 5.3349 5.7590 6.1446 0.1874 0.1736 0.1627