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. 1. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage value. Annual costs are expected to be $1,950. 2. A new power line will cost $17,500 to install, with power costs expected to be $950 per year. The salvage value of the line is considered to be zero with useful life of 4 years. At an interest rate of 15% per year, which alternative 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. 1. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage value. Annual costs are expected to be $1,950. 2. A new power line will cost $17,500 to install, with power costs expected to be $950 per year. The salvage value of the line is considered to be zero with useful life of 4 years. At an interest rate of 15% per year, which alternative should be selected on the basis of a future worth analysis?
Chapter1: Making Economics Decisions
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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.
1. Solar cells will cost $10,500 to install and will have a useful life of 4 years with no salvage
value. Annual costs are expected to be $1,950.
2. A new power line will cost $17,500 to install, with power costs expected to be $950 per
year. The salvage value of the line is considered to be zero with useful life of 4 years.
At an interest rate of 15% per year, which alternative should be selected on the basis of a future
worth analysis?
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