5. Two alternatives are under consideration for providing energy at a remote research station, one of which must be selected: geothermal and solar. The benefits and costs associated with each alternative are shown. Use the B/C method to determine whic should be selected at an interest rate of 6% per year over a 20-year study period. Geothermal Solar

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
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6. Two alternatives are under consideration for providing energy at a remote research
station, one of which must be selected: geothermal and solar. The benefits and costs
associated with each alternative are shown. Use the B/C method to determine which
should be selected at an interest rate of 6% per year over a 20-year study period.
Initial cost, $
Annual maintenance, $/year
Benefits, $/year
Geothermal
200,000
31,000
39,500
Solar
50,000
9,000
16,000
Transcribed Image Text:6. Two alternatives are under consideration for providing energy at a remote research station, one of which must be selected: geothermal and solar. The benefits and costs associated with each alternative are shown. Use the B/C method to determine which should be selected at an interest rate of 6% per year over a 20-year study period. Initial cost, $ Annual maintenance, $/year Benefits, $/year Geothermal 200,000 31,000 39,500 Solar 50,000 9,000 16,000
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