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Telefono Mexico is expanding its facilities to serve a new manufacturing plant. The new plant will require 2000 telephone lines this year, and another 2000

"Telefono Mexico is expanding its facilities to serve a new manufacturing plant. The new plant will require 2000 telephone lines this year, and another 2000 lines after expansion in 12 years. The plant will operate for 27 years. Option 1: Provide one cable now with capacity to serve 4000 lines. The cable will cost $23,000 and annual maintenance costs will be $2300. Option 2: Provide a cable with capacity to serve 2000 lines now and a second cable to serve the other 2000 lines in 12 years. Each cable will cost $12,000 and will have an annual maintenance cost of $1300. The telephone cables will last 27 years, and the cost of removing the cables is offset by their salvage value. Which alternative should be selected, assuming a 10% interest rate? Enter the net present cost as a positive number of the option that should be selected."

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