Question: Three projects are under evaluation. Project A will cost $2 million to build and $300,000 per year to operate. Project B will cost $3.5 million

Three projects are under evaluation.

Project A will cost $2 million to build and $300,000 per year to operate.

Project B will cost $3.5 million to build and $200,000 a year to operate.

Project C will cost $5 million to build and $100,000 a year to operate.

Money costs 6 percent.

Based on the Life Cycle Cost criterion, which project will you recommend if the project lives are 40 years?

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