QUESTION $4.(25$p$)$

The municipality has determined two separate locations for a factory project development $($district A and district B$).$ The assumption will be made that the lifespan of projects goes on forever.

District A: Initial investment cost is $$7,000,000.$ Annual maintenance costs are expected to be $$20,000.$ There is a renewal cost of $$50,000$ every$(2+5$ year. An annual return $($income$)$ of $($$$400,000+2*10,000)$ is expected from the production line.

District B: The initial investment cost is $$8,000,000.$ Annual maintenance costs are expected to be $$20,000.$ There is a renewal cost of $$60,000$ every $(2+5)$ year. An annual return of $($$$500,000+2*20,000)$ is expected from the production line.

Decide which investment should be chosen if the interest rate is $5\%.$