Question: Compare the following two options for powering a remote wilderness cabin using present worth analysis Solar power Initial costs of $150,000 include the equipment (including
Compare the following two options for powering a remote wilderness cabin using present worth analysis Solar power Initial costs of $150,000 include the equipment (including storage batteries) and installation. Yearly maintenance costs = $200. Useful life of 25 years with no salvage value. Diesel-powered generator Initial costs of $80,000 include equipment and installation. Diesel fuel is expected to cost $0.90 per gallon in the first year and the generator is estimated to use an average of 900 gallons per year. Diesel fuel costs are estimated to rise by 3% each year over the last. The generator has a useful life of 15 years with no salvage value. Use an i = 8% and a 25-year planning horizon
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