ALTERNATIVE A: A solar panel costs 25,000. 7 solar panels are needed in a company. The installation fee is 10,000 and will have a useful 25 years with no salvage value. The maintenance per year is 5,000. The annual interest rate for solar panel is 1.5%. ALTERNATIVE B: A new power line will cost 20,000, with power costs expected to be 1,950.90 per month. The annual increase rate of electric bill is about 3.5%. Which alternative should be selected on the basis of a future worth analysis? Illustrate the cash flow diagram. USE MS EXCEL IN COMPUTATION and SHOW THE SOLUTION PROPERLY.

ALTERNATIVE A: A solar panel costs 25,000. 7 solar panels are needed in a company. The installation fee is 10,000 and will have a useful 25 years with no salvage value. The maintenance per year is 5,000. The annual interest rate for solar panel is 1.5%. ALTERNATIVE B: A new power line will cost 20,000, with power costs expected to be 1,950.90 per month. The annual increase rate of electric bill is about 3.5%. Which alternative should be selected on the basis of a future worth analysis? Illustrate the cash flow diagram. USE MS EXCEL IN COMPUTATION and SHOW THE SOLUTION PROPERLY.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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D2
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