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Question 2 Two possible routes for a power line are under study. Data on the routes are as shown in the following table: Option Information Length First Cost Maintenance cost Useful Life (years) Salvage Value Yearly power loss Annual Taxes Around the Lake Under the Lake 5 km $25,000 /km $400/km/yr 20 $5000/km $500/km 2% of the first cost 2% of the first cost 15 km $5000/ km $200/km/yr 15 $3000/km S500/km If MARR = 10%, which alternative should you select? Justify %3D Vour answer

Question 2 Two possible routes for a power line are under study. Data on the routes are as shown in the following table: Option Information Length First Cost Maintenance cost Useful Life (years) Salvage Value Yearly power loss Annual Taxes Around the Lake Under the Lake 5 km $25,000 /km $400/km/yr 20 $5000/km $500/km 2% of the first cost 2% of the first cost 15 km $5000/ km $200/km/yr 15 $3000/km S500/km If MARR = 10%, which alternative should you select? Justify %3D Vour answer

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Question 2 Two possible routes for a power line are under study. Data on the routes are as shown in the following table: Option Information Length First Cost Maintenance cost Useful Life (years) Salvage Value Yearly power loss Annual Taxes Around the Lake Under the Lake 15 km 5 km $25,000 /km $400/km/yr $5000 / km $200/km/yr 15 20 $3000/km S5000/km S500/km |2% of the first cost 2% of the first cost S500/km If MARR = 10%, which alternative should you select? Justify your answer. (
Transcribed Image Text:Question 2 Two possible routes for a power line are under study. Data on the routes are as shown in the following table: Option Information Length First Cost Maintenance cost Useful Life (years) Salvage Value Yearly power loss Annual Taxes Around the Lake Under the Lake 15 km 5 km $25,000 /km $400/km/yr $5000 / km $200/km/yr 15 20 $3000/km S5000/km S500/km |2% of the first cost 2% of the first cost S500/km If MARR = 10%, which alternative should you select? Justify your answer. (
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