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 $7,500 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 $1,300. A new power line will cost $11,000 to install, with power costs expected to be $1,000 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 10% 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 $ (Click to select) should be selected on the basis of a future worth analysis. (Click to select) Solar cells Electric line
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 $7,500 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 $1,300. A new power line will cost $11,000 to install, with power costs expected to be $1,000 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 10% 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 $ (Click to select) should be selected on the basis of a future worth analysis. (Click to select) Solar cells Electric line
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please provide steps by step answer with proper calculation and explanation with final answer.....
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 $7,500 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 $1,300. A new power line will cost $11,000 to install, with power costs expected to be $1,000 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 10%
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 $
(Click to select) should be selected on the basis of a future worth analysis.
(Click to select)
Solar cells
Electric line
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education