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The City of Brandon is installing a new swimming pool in the municipal recreation centre. Two designs are under consideration, both of which are to
The City of Brandon is installing a new swimming pool in the municipal recreation centre. Two designs are under consideration, both of which are to be permanent (i.e., lasting forever). The first design is for a reinforced concrete pool that has a first cost of $1,300,000. Every 10 years, the inner surface of the pool would have to be refinished and painted at a cost of $140,000. The second design consists of a metal frame and a plastic liner, which would have an initial cost of $575,000 For this alternative, the plastic liner must be replaced every 6 years at a cost of $70,000, and every 15 years the metal frame would need replacement at a cost of $120,000. Extra insurance of $3000 per year is required for the plastic liner (to cover repair costs if the liner leaks). The city's cost of long-term funds is 4 percent. Determine which swimming pool design has the lower present cost. Click the icon to view the table of compound interest factors for discrete compounding periods when i = 4%. The present cost of the plastic liner pool is $ The pool has the lower present cost. The present cost of the concrete pool is $ (Round to the nearest dollar as needed.)
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