Which is the best alternative

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Reference no: EM13303377

A city has two alternatives for improving its sewage system. Use a 4% cost of money, which is conservative for a municipality.

Option A: Initial cost of $12,000,000; annual operating cost of $155,000; service life of 20 years; salvage value of $2,500,000.

Option B: Initial cost of $6,000,000; annual operating cost of $250,000; service life of 10 years; salvage value of $20,000.

Which is the best alternative?

Reference no: EM13303377

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