Question: Edit question A regional flood control district has a flood control project will require either replacement of a large, galvanized culvert or the construction of

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A regional flood control district has a flood control project will require either replacement of a large, galvanized culvert or the construction of a concrete canal. The cost of the canal, which will last indefinitely, is $7,500,000. Maintenance costs are $5,000 per year. A culvert, which will have to be replaced every 30 years, will cost $4,000,000 and has an annual maintenance cost of $7,000. Salvage values are roughly $0 and the interest rate is 5%. Which alternative has the lower equivalent annual cost?

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