(Ch9) Two designs have been proposed for lighting your parking lot

| November 24, 2016

(Ch9) Two designs have been proposed for lighting your parking lot. The two options are

similar except in the type of pole that will be used. Option 1 uses wood poles which will cost

$6000 each and will last for twelve years with no salvage value. Option 2 uses steel poles

which cost $11,000 each, will last 24 years and will have $200 salvage value. Use an

interest rate of 8% and determine whether the increased life of the steel pole justifies its

increased cost. Show all work.

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