Question: Two possible routes for a power line are under study. Data on the routes are as follows: If 7% interest is used, should the power

Two possible routes for a power line are under study. Data on the routes are as follows:

Two possible routes for a power line are under

If 7% interest is used, should the power line be routed around the lake or under the lake? *Cash flow diagrams must be made.

Around the Lake Under the Lake Length 15 km 5 km First cost $5000/km $25,000/km Maintenance $200/km/yr $400/km/yr Useful life, in years 15 15 Salvage value $3000/km $5000/km Yearly power loss $500/km $500/km Annual property taxes 2% of first cost 2% of first cost

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