6. (30 points) A city is planning on constructing a water treatment plant. Two alternatives are under consideration. Plant 1 has an initial cost of $20,000,000. Every 20 years, major repairs and cleanup are required at a cost of $8,000,000. Due to the necessity to remove sludge and make minor repairs, annual costs of operating the treatment plant are estimated to be $700,000 for the first year after installing the plant and increases by $10,000 each year from year 2 to year 20 when the major repair and cleanup are required. Once these repairs and cleanups are done, the estimated annual operating cost will be reduced to $700,000 the following year which again increases by $10,000 each year until the next major repair. Plant 2 has an initial cost of $30,000,000. Every 15 years, major repairs and cleanup are required at a cost of $5,000,000. Annual costs of cleaning the treatment plant are estimated to be $500,000. Additionally, every 6 years minor repairs need to be performed for a cost of $100,000. Write the formulas (using TVOM factors) to find the capitalized cost for the two alternatives based on a 3% MARR rate. What condition do you test to determine which alternative is better? (You do not need to solve the problem.) 6. (30 points) A city is planning on constructing a water treatment plant. Two alternatives are under consideration. Plant 1 has an initial cost of $20,000,000. Every 20 years, major repairs and cleanup are required at a cost of $8,000,000. Due to the necessity to remove sludge and make minor repairs, annual costs of operating the treatment plant are estimated to be $700,000 for the first year after installing the plant and increases by $10,000 each year from year 2 to year 20 when the major repair and cleanup are required. Once these repairs and cleanups are done, the estimated annual operating cost will be reduced to $700,000 the following year which again increases by $10,000 each year until the next major repair. Plant 2 has an initial cost of $30,000,000. Every 15 years, major repairs and cleanup are required at a cost of $5,000,000. Annual costs of cleaning the treatment plant are estimated to be $500,000. Additionally, every 6 years minor repairs need to be performed for a cost of $100,000. Write the formulas (using TVOM factors) to find the capitalized cost for the two alternatives based on a 3% MARR rate. What condition do you test to determine which alternative is better? (You do not need to solve the problem.)