It is proposed to place a cable on existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical?           Compare alternatives using the following methods: a) ROR on Additional Investment Method b) Annual Cost Method c) Equivalent Uniform Annual Cost Method d) Present Worth Cost Method  Show complete manual solution

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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It is proposed to place a cable on existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical?
         

Compare alternatives using the following methods:
a) ROR on Additional Investment Method
b) Annual Cost Method
c) Equivalent Uniform Annual Cost Method
d) Present Worth Cost Method 

Show complete manual solution 

 

 

 

Length, miles
First Cost of Cable per mile
Annual Maintenance per mile
Interest on investment
Taxes
Net Salvage value per mile
Life, years
Land Route
10
P 40,000
P 950
18%
3%
P 12, 000
15
Submarine Route
5
P 68, 000
P3, 500
18%
3%
P 22, 000
15
Transcribed Image Text:Length, miles First Cost of Cable per mile Annual Maintenance per mile Interest on investment Taxes Net Salvage value per mile Life, years Land Route 10 P 40,000 P 950 18% 3% P 12, 000 15 Submarine Route 5 P 68, 000 P3, 500 18% 3% P 22, 000 15
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