It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical? Use future worth method and present worth method. Land RouteSubmarine RouteLength, milesFirst cost of cable per mileAnnual maintenance per mileInterest on InvestmentТахesNet salvage value per mileLife, years10P40,0005P68,0009503,50018%18%3%3%12,00022,0001515

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It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical? Use future worth method and present worth method.

Land Route
Submarine Route
Length, miles
First cost of cable per mile
Annual maintenance per mile
Interest on Investment
Тахes
Net salvage value per mile
Life, years
10
P40,000
5
P68,000
950
3,500
18%
18%
3%
3%
12,000
22,000
15
15

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