Two methods of carrying away surface runoff water from a new subdivision are being evaluated. • Method A. Dig a ditch. The first cost would be S60,000, and $25,000 of re-digging and shaping would be required at five-year intervals forever. • Method B. Lay concrete pipe. The first cost would be $150,000, and a replacement would be required at 50-year intervals at a net cost of $180,000 forever Ati- 12%, which method is the better one? Click the icon to view the interest factors for discrete compounding when / 12% per year. The capitalized equivalent worth for method A is S thousand, (Round to the
Two methods of carrying away surface runoff water from a new subdivision are being evaluated. • Method A. Dig a ditch. The first cost would be S60,000, and $25,000 of re-digging and shaping would be required at five-year intervals forever. • Method B. Lay concrete pipe. The first cost would be $150,000, and a replacement would be required at 50-year intervals at a net cost of $180,000 forever Ati- 12%, which method is the better one? Click the icon to view the interest factors for discrete compounding when / 12% per year. The capitalized equivalent worth for method A is S thousand, (Round to the
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Two methods of carying away surface runoff water from a new subdivision are being evaluated.
• Method A. Dig a ditch. The first cost would be $60,000, and $25,000 of re-digging and shaping would be required at five-year intervals forever.
• Method B. Lay concrete pipe. The first cost would be $150,000, and a replacement would be required at 50-year intervals at a net cost of $180,000 forever.
At i- 12%, which method is the better one?
Click the icon to view the interest factors for discrete compounding when / 12% per year.
The capitalized equivalent worth for method A is $
thousand. (Round to the nearest whole number.)
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