Question: In the design of a special-use structure, two mutually exclusive alternatives are under consideration. These design alternatives are as follows:
D1 D2
Capital investment $50,000 $120,000
Annual expenses $9,000 $5,000
Useful life (years) 20 50
Market value (at end $10,000 $20,000
of useful life)
If perpetual service from the structure is assumed, which design alternative do you recommend? The MARR is 10% per year.