An electric utility is taking bids on the purchase, installation, and operation of microwave towers. Table P5.52 has some details associated with the two bids that were received.
Which is the most economical bid if the interest rate is considered to be 11%? Either tower will have no salvage value after 20 years of use Use the NPW method to compare these two mutually exclusive plans

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Cost per Tower Bid A S112,000 $25,000 Bid B $98.000 $30.000 Equipment cost Installation cost Annual maintenance and inspection fee $2.000 $2,500 Annual extra income taxes Life Salvage value $800 35 years $0 40 years $0