An irrigation return flow drain has sampling equipment

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An irrigation return flow drain has sampling equipment that can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $14,000 to install and will have a useful life of 10 years. Annual costs for inspection, cleaning, etc., are expected to be $1500. A new power line will cost $12,000 to install, with power costs expected to be $800 per year. The water sampling project will end in 5 years, with the salvage value of the solar cells expected to be 20% of the first cost. The electric line will stay in place, so its salvage value is considered to be zero. At an interest rate of 10% per year, which alternative should be selected?

Reference no: EM13839403

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