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 the first cost and have a yearly power loss of $500 km Other costs are Around the lake Under the lake Length 15 km 5 km First cost $9,000 km $25,000 km Maintenance $200 km yr $300 km yr Required 1 Develop the cash flow diagram for both alternatives 2 Apply the annual analysis 3 Which one should be considered

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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 the first cost and have a yearly power loss of $500/km.

Other costs are:

	Around the lake	Under the lake
Length	15 km	5 km
First cost	$9,000/km	$25,000/km
Maintenance	$200/km/yr	$300/km/yr

Required:

1. Develop the cash flow diagram for both alternatives.

2. Apply the annual analysis.

3. Which one should be considered?

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