Two possible routes for a power line under study. Data on the routes are given below. The interest rate is 7%. Should the power line be routed around the lake or under the lake? Use annual worth analysis to determine your answer.

Around the Lake Under the Lake
Initial Costs ($/km) 75,000 125,000
Maintenance ($ per km per year) 3,000 2,000
Useful Life (Years) 15 10
Salvage Value ($/km) 15,000 25,000
Annual Power Loss ($/km) 7,500 2,500

Answer rating: 100% (QA)

To determine whether the power line should be routed around or under the lake we can use annual wort... View the full answer