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Two possible routes for a power line are under study. The following table provides the data collected to determine the best route. Around the Lake
Two possible routes for a power line are under study. The following table provides the data collected to determine the best route.
| Around the Lake | Under the Lake |
First cost | $135,000 | $125,000 |
Maintenance | $3000/yr | $1,500/yr |
Annual Power Loss | $7500/yr | $2500/yr |
Salvage Value | $0 | $0 |
Useful Life | 15 years | 15 years |
Interest rate | 8% | 8% |
a.Compute the EUAC for the first route (i.e. around the lake)
b.Compute the EUAC for the second route (i.e. under the lake)
c.Should the power lien be routed around the lake or under the lake?
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