Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:2 The local municipal district is upgrading its outdated water supply system. Two options are being
evaluated - a concrete and steel system or an earthen dam and aqueduct. The costs for each are
shown below. Both options will last forever if they are properly maintained.
age
Earth
Initial Cost
Annual Maintenance
Replacement of Parts
every 15 years
Concrete
$467,000 $150,000
$1,600
$10,000
N/A
$74,400
The district uses an MARR of
8%
What is the present worth of costs for each alternative?
Concrete/Steel
Earthen
Which option should the MD select?
Try Again
Try Again
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