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The chief ranger of the state's Department of Natural Resources is considering a new plan for fighting forest fires in the state's forest lands. The current plan uses eight fire-control stations, which are scattered throughout the interior of the state forest. Each station has a four-person staff, whose annual compensation totals $400,000. Other costs of operating each base amount to $300,000 per year. The equipment at each base has a current salvage value of $320,000. The buildings at these interior stations have no other use. To demolish them would cost $30,000 each.
Required:
Problem 1. Use the incremental-cost approach to prepare a net-present-value analysis of the chief ranger's decision between the interior fire-control plan and the perimeter fire-control plan. (Round your final answers to the nearest whole dollar.)
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