A tunnel to transport water through the Lubbock mountain range initially costs $1,000,000 and has expected maintenance costs that will occur in a 6-year cycle repeating over an infinite period as shown below. The annual savings from the tunnel are estimated to be $160,000 per year. The interest rate is 10%. Is this a good investment? Apply Annual Worth Analysis

Answer rating: 100% (QA)

To determine if the tunnel investment is a good investment we can use the Annual Worth Analysis ... View the full answer