Two methods of carrying away surface runoff water from a new subdivision are being evaluated:

• Method A: Dig a ditch. The initial cost would be $30,000, and $10,000 of re-digging and shaping would be required at five-year intervals forever.
• Method B: Lay concrete pipe. The initial cost would be $75,000, and replacement pipe would be required at 50-year intervals at a net cost of $90,000 indefinitely.

At i = 12%, which method is the better one? (Use the capitalized equivalent -worth approach.)