Two methods of carrying away surface runoff water from a new subdivision are being evaluated.
Method A. Dig a ditch. The first cost would be $60,000, and $25,000 of redigging and shaping would be required at five-year intervals forever.
Method B. Lay concrete pipe. The first cost would be $150,000, and a replacement would be required at 50-year intervals at a net cost of $180,000 forever.
At i = 12%, which method is the better one?