Problem
In the construction of an aqueduct to expand the water supply of a city, there are two alternatives for a particular portion of the aqueduct. One alternative is a tunnel that has an initial cost of $5.7 million, zero maintenance cost, zero salvage value and a permanent useful life. The second alternative is a pipeline that has an initial cost of $5 million, zero maintenance cost, zero salvage value and 53 years of useful life. If there is a permanent need for the aqueduct, should the tunnel or the pipeline be selected for this particular portion of the aqueduct? Use annual cash flow analysis and assume a 5% interest rate. Use either Excel financial functions or compound interest formula or factor notation. (If you use excel formulas please show the formulas)
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.