Solar 25,000 × 7= 125,000+10,000= 135,000 3,000 0 0 3.5% 1.5% 25 25 ALTERNATIVE A: A solar panel costs 25,000. 7 solar panels are needed in a company. The installation fee s 10,000 and will have a useful 25 years with no salvage value. The maintenance per year is 5,000. The annual interest rate for solar panel is 2%. FIRST COST ANNUAL COST SALVAGE VALUE ANNUAL INTEREST RATE STUDY PERIOD Power Line 20,000 1,950.90/month × 12= 23,410.8/year ALTERNATIVE B: A new power line will cost 20,000, with power costs expected to be 1,950.90 per month. The annual increase rate of electric bill is about 3.5%. Which alternative should be selected on the basis of a future worth analysis? Illustrate the cash flow diagram. USE MS EXCEL IN COMPUTATION and SHOW THE SOLUTION PROPERLY.

Solar 25,000 × 7= 125,000+10,000= 135,000 3,000 0 0 3.5% 1.5% 25 25 ALTERNATIVE A: A solar panel costs 25,000. 7 solar panels are needed in a company. The installation fee s 10,000 and will have a useful 25 years with no salvage value. The maintenance per year is 5,000. The annual interest rate for solar panel is 2%. FIRST COST ANNUAL COST SALVAGE VALUE ANNUAL INTEREST RATE STUDY PERIOD Power Line 20,000 1,950.90/month × 12= 23,410.8/year ALTERNATIVE B: A new power line will cost 20,000, with power costs expected to be 1,950.90 per month. The annual increase rate of electric bill is about 3.5%. Which alternative should be selected on the basis of a future worth analysis? Illustrate the cash flow diagram. USE MS EXCEL IN COMPUTATION and SHOW THE SOLUTION PROPERLY.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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