What must be the first cost of the above ground line

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Reference no: EM132207803

Question: A remotely located air sampling station can be pow ered by solar cells or by running an above ground 6.21 The main electric line to the site and using conventional power. Solar cells will cost $16,600 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $2400. A new power line will cost $31,000 to install, with power costs expected to be $1000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is front-end mental c $1200 pe For a lo first-yea equivale with o 12% pe $23,00 considered to be zero. At an interest rate of 10% per year,

(a) which alternative should be selected on the basis of an annual worth analysis and

(b) what must be the first cost of the above ground line to make the two alternatives equally attractive economically?

Reference no: EM132207803

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