The City of Omniville has two options for a viaduct. One is a permanent cement canal...

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The City of Omniville has two options for a viaduct. One is a permanent cement canal and the other a cast iron (CI) pipe. If details for the options are as shown, at what rate of interest should the city be indifferent to either choice? (Hint: the EUAC for the 2 projects should be made the same by changing the rate.) Initial cost Life Annual maintenance cost Salvage Initial Rate Cement Canal ($6,000,000) Perpetual $700,000 $0 14.0% CI PIPE ($5,500,000) 30 $875,000 $770,000 years p. y. The City of Omniville has two options for a viaduct. One is a permanent cement canal and the other a cast iron (CI) pipe. If details for the options are as shown, at what rate of interest should the city be indifferent to either choice? (Hint: the EUAC for the 2 projects should be made the same by changing the rate.) Initial cost Life Annual maintenance cost Salvage Initial Rate Cement Canal ($6,000,000) Perpetual $700,000 $0 14.0% CI PIPE ($5,500,000) 30 $875,000 $770,000 years p. y.

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