Required information A remotely located air sampling station can be powered by solar cells or by running an above ground electric line to the site and using conventional power. Solar cells will cost $16,000 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, and other maintenance issues are expected to be $2,500. A new power line will cost $22,500 to install, with power costs expected to be $1,000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is considered to be zero. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. At an interest rate of 10% per year and using an AW analysis, which alternative should be selected? The annual worth of installing solar cells is $- 25477, and the annual worth of installing a new power line is $- 26291 The alternative to be selected is installing solar cells ✔

Required information A remotely located air sampling station can be powered by solar cells or by running an above ground electric line to the site and using conventional power. Solar cells will cost $16,000 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, and other maintenance issues are expected to be $2,500. A new power line will cost $22,500 to install, with power costs expected to be $1,000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is considered to be zero. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. At an interest rate of 10% per year and using an AW analysis, which alternative should be selected? The annual worth of installing solar cells is $- 25477, and the annual worth of installing a new power line is $- 26291 The alternative to be selected is installing solar cells ✔

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Don't use Excel and pen or paper
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