Three projects are under evaluation. Project A will cost $2 million to build and $300,000 per year to operate. Project B will cost $3.5 million to build and $200,000 a year to operate. Project C will cost $5 million to build and $100,000 a year to operate. Money costs 6 percent. Based on the Life Cycle Cost criterion, which project will you recommend if they are assumed to have infinitely long useful economic lives?

Three projects are under evaluation. Project A will cost $2 million to build and $300,000 per year to operate. Project B will cost $3.5 million to build and $200,000 a year to operate. Project C will cost $5 million to build and $100,000 a year to operate. Money costs 6 percent. Based on the Life Cycle Cost criterion, which project will you recommend if they are assumed to have infinitely long useful economic lives?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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