c. There is currently a proposal from LA transit that wishes to build a railway between Los Angeles and Las Vegas along the 15 freeway. If it goes through, Virgin Trains USA will have to start thinking about building the tracks. They have an option of either using treated and untreated wood ties. Treated ties will have an initial cost of $7.5 million and will last 12 years. Untreated ties have an initial cost of $4 million and are expected to last 6 years. The company is planning for 20 years of service for this train, replacing the ties as they get used up. When salvaging the ties, if they have a remaining useful life of 4 years or more, they can be sold to another railroad company for $2.55 million. But if they are less than 4 years until their end-of-life (or at their end-of-life), they can only be salvaged for $570,000. Assuming an interest rate of 7%, answer the following questions. i. Draw the cash flow diagrams for the treated and untreated ties. ii. Compute the net present worth and EUAW for both the treated and untreated ties to determine which the company should use. Ans: PWtreat = -$9,918,000, EU AWreat = -$936,241.25, PWuntreat = -$8,164,346, EU AW untreat = -$769,627.80