Which one is more attractive at an interest rate

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Reference no: EM131004417

Two methods are being evaluated for constructing a second-story floor onto an existing building at the Pentagon. Method A will use lightweight expanded shale on a metal deck with open web joists and steel beams. For this method, the costs will be $14,100 for concrete, $6000 for metal decking, $4300 for joists, and $2600 for beams. Method B will be a reinforced concrete slab that will cost $5200 for concrete, $1400 for rebar, $2600 for equipment rental, and $1200 for expendable supplies. Special additives will be included in the lightweight concrete that will improve the heat transfer properties of the floor. If the energy costs for method A will be $600 per year lower than for method B, which one is more attractive at an interest rate of 7% per year over a 20-year study period? Use the B/C method.

Reference no: EM131004417

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