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Problem 7 [12 points total] Two possible routes for a power line are under study. Data on the routes are as follows: Around the
Problem 7 [12 points total] Two possible routes for a power line are under study. Data on the routes are as follows: Around the lake Under the lake Length First cost Annual maintenance 15 km $5000/km 4 km $25,000/km $200/km Useful life in years 18 Salvage value $3000/km Annual power loss/km $500/km $300/km 12 $5000/km $500/km If the MARR is 7% annual effective, explain how you would decide between these two alternatives (remember to draw cash flow diagrams).
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