Question: Hydro One is evaluating buying two different transforms. Transformer #1: costs $370,000 has a 3 year life, has pre-tax operating cost of $80,000 per year.

Hydro One is evaluating buying two different transforms. Transformer #1: costs $370,000 has a 3 year life, has pre-tax operating cost of $80,000 per year. Transformer #2: costs $475,000 has a 5 year life, has pre-tax operating cost of $30,000 per year. Both transformers are Class 8 (CCA rate of 20% per year) and both have a savage value of $40,000. The firms tax rate is 35% and discount rate is 10% What is the PVCCATS for Transformer #1

? Select one: a. $63,874.46 b. $45,584.32 c. $52,247.56 d. $75,396.82 e. None of these

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