Check my work 5 A remotely located air sampling station can be powered by solar
ID: 1138619 • Letter: C
Question
Check my work 5 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 $8,500 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 $1,750. A new power line will cost $15,500 to install, with power costs expected to be $650 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 11% per year, which alternative should be selected on the basis of a future worth analysis? 10 points The future worth of solar cells is $_ and that of electric line is $1 eBook Hint Print Relerences Glick to select) 3 should be selected on the basis of a future worth analysis.Explanation / Answer
FW, Solar ($) = 8,500 x F/P(11%, 4) + 1,750 x F/A(11%, 4) = 8,500 x 1.5181** + 1,750 x 4.7097**
= 12,903.85 + 8,241.98 = 21,145.83
FW, Electric ($) = 15,500 x F/P(11%, 4) + 650 x F/A(11%, 4) = 15,500 x 1.5181** + 650 x 4.7097**
= 23,530.55 + 3,061.31 = 26,591.86
**From F/P and F/A Factor tables