Question
You are working on a project performing the cleanup at a previous drilling site. Since you are decommissioning the well, it is the companys responsibility
You are working on a project performing the cleanup at a previous drilling site. Since you are decommissioning the well, it is the companys responsibility to ensure the contaminants will remain contained for an infinite period of time to reduce the exposure of locals to groundwater contamination. You and your team devise three different options as outlined in the following table. Compare the capitalized costs for each option and choose the most desirable option. Assume the interest rate is 8%.
| Option A | Option B | Option C |
Initial Cost | 25,000,000 | 10,000,000 | 17,500,000 |
Maintenance Cost | 250,000 | 500,000 | 400,000 |
Capitalized Cost |
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