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City engineers are considering 2 plans for city tunnels. The will decide between the 2 alternatives using 8 % interest rate. Plan A is a

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City engineers are considering 2 plans for city tunnels. The will decide between the 2 alternatives using 8% interest rate. Plan A is a full capacity tunnel that will meet the needs of city forever. Plan B involves building a half capacity tunnel now and a second half capacity tunnels in 20 years, when the extra capacity will be needed. Table 2 outlines the criteria and associated costs.
Table 2/ Jadual 2\table[[\table[[Criteria],[Kriteria]],Plan A,Plan B],[\table[[Initial Construction Cost],[Kos Pembinaan Permulaan]],RM 3,000,000,\table[[RM 2,000,000 now +],[RM 2,000,000 in 20 years],[for second tunnel]]],[\table[[Maintenance Costs],[(every 10 years)],[Kos Penyelenggaraan],[(setiap 10 tahun)]],RM 100,000,RM 80,000 per tunnel],[\table[[Additional Costs],[Kos-kos tambahan]],None,\table[[RM 15,000 per year per],[tunnel for extra pumping]]],[\table[[Cost Timing],[Masa Kos]],\table[[Initial cost + every],[10 years for lining],[repairs]],\table[[Initial cost for first tunnel,],[in 20 years for second],[tunnel + every 10 years],[for maintenance + annual],[for pumping]]]]
Your task is to calculate:
i. Which alternative is preferred? Use a Present Worth comparison.
ii. Which alternative is preferred? Use an Annual Worth comparison.
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