A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,950. A new power line will cost $17,500 to install, with power costs expected to be $950 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 15% per year, which alternative should be selected on the basis of a future worth analysis? The future worth of solar cells is $ and that of electric line is $ Electric line v should be selected on the basis of a future worth analysis.
A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,950. A new power line will cost $17,500 to install, with power costs expected to be $950 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 15% per year, which alternative should be selected on the basis of a future worth analysis? The future worth of solar cells is $ and that of electric line is $ Electric line v should be selected on the basis of a future worth analysis.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional
power. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection,
cleaning, etc. are expected to be $1,950. A new power line will cost $17,500 to install, with power costs expected to be $950 per year.
Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 15% per
year, which alternative should be selected on the basis of a future worth analysis?
The future worth of solar cells is $
and that of electric line is $
Electric line
v should be selected on the basis of a future worth analysis.
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