Question

A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $13,500 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,400. A new power line will cost $12,000 to install, with power costs expected to be $1,100 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 12% per year, which alternative should be selected on the basis of a future worth analysis? The future worth of solar cells is $ ____ and that of electric line is $ ___.

Slection One. Electric line ot Solar cells should be selected on the basis of a future worth analysis.

Answer 1