connect to points son opposite sides. 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 P40,000 950 18% 3% 12000 15 Submarine Route 5 P68,000 3,500 18% 3% 22000 15 Which is more economical? Ans. The submarine cable is more economical; the rate of return on additional investment is only 8.97%.

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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3. It is proposed to place a cable on an existing pole line along the shore of a lake to
connect to points son opposite sides.
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
P40,000
950
18%
3%
12000
15
Submarine Route
5
P68,000
3,500
18%
3%
22000
15
Which is more economical?
Ans. The submarine cable is more economical; the rate of return on additional
investment is only 8.97%.
Transcribed Image Text:3. It is proposed to place a cable on an existing pole line along the shore of a lake to connect to points son opposite sides. 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 P40,000 950 18% 3% 12000 15 Submarine Route 5 P68,000 3,500 18% 3% 22000 15 Which is more economical? Ans. The submarine cable is more economical; the rate of return on additional investment is only 8.97%.
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