Economical on the basis of a present worth analysis

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Midwest Power and Light operates 14 coal-fired power plants in several states around the United States. The company recently settled a lawsuit by agreeing to pay $60 million in mitigation costs related to acid rain. The settlement included $21 million to reduce emission from barges and trucks in the Ohio River Valley, $24 million for Shenandoah National Park, and $10 million to acquire ecologically sensitive lands in Appalachia. The question of how to distribute the money overtime has been posed (that is, $5.5 million 2 years from now, and $30 million 7 years from now. Determine which plan is more economical on the basis of a present worth analysis over a 10-years period at an interest rate of 10% per year.

Reference no: EM131091507

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