Compare the two plans using the cw method

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Reference no: EM131761129

Question: Find the CW for both projects, Skyline and Prairie.

The National Park Service is considering two plans for rejuvenating the forest and landscape of a large tract of public land. The study period is indefinitely long, and the Park Service's MARR is 9% per year. You have been asked to compare the two plans using the CW method. The first plan (Skyline) calls for an initial investment of $550,000, with expenses of $15,000 per year for the first 20 years and $25,000 per year thereafter. Skyline also requires an expenditure of $200,000 twenty years after the initial investment, and this will repeat every 20 years thereafter. The second plan (Prairie View) has an initial investment of $750,000 followed by a single (one-time) investment of $310,000 thirty years later. Prairie View will incur annual expenses of $11,000 forever. Based on the CW measure, which plan would you recommend?

Reference no: EM131761129

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