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 the following methods to support your answer. a) Equivalent Uniform Annual Cost Method (show cash flow diagram) b) Rate of return on additional investment
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 the following methods to support your answer. a) Equivalent Uniform Annual Cost Method (show cash flow diagram) b) Rate of return on additional investment
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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? Use the following methods to support your answer.
a) Equivalent Uniform Annual Cost Method (show cash flow diagram)
b) Rate of
![Length, miles
First cost of cable per mile
Annual Maintenance per mile
Interest on investment
Taxes
Net Salvage Value per mile
Life, years
Land Route
10
P 40,000
P 950
15%
3%
P 12,000
10
Submarine Route
5
P 68,000
P 3,500
15%
3%
P 22,000
15](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87eb59d6-16a8-45f1-bb6f-765565ce510d%2F64c5c9c1-6961-4791-a783-bbb4bca3c952%2F7y97d0m_processed.png&w=3840&q=75)
Transcribed Image Text:Length, miles
First cost of cable per mile
Annual Maintenance per mile
Interest on investment
Taxes
Net Salvage Value per mile
Life, years
Land Route
10
P 40,000
P 950
15%
3%
P 12,000
10
Submarine Route
5
P 68,000
P 3,500
15%
3%
P 22,000
15
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