Question: Two possible routes for a power line are under study. In both cases the power line will last 15 years, have no salvage value, have

Two possible routes for a power line are under study. In both cases the power line will last 15 years, have no salvage value, have annual property taxes of 2% of ?rst cost, and have a yearly power loss of $500/km.

Around the lake Under the lake
Length 15 km 5 km
First cost $9000/km $25,000/km
Maintenance $200/km/yr $300/km/yr

If 6% interest is used, should the power line be routed around the lake or under the lake?

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