A project engineer with EnvironCare is assigned to start up a new office in a city where a 6-year contract has been finalized to collect and analyze ozone-level readings. Two lease options are available, each with a first cost, annual lease cost, and deposit-return estimates shown below. The MARR is 15% per year Location A Location I First cost, $ Annual lease cost, $ per year Deposit return, $ Lease term, years – 15,000 -3.500 1.000 6 – 18.000 -3.100 2.000 9 EnvironCare has a practice of evaluating all projects over a 5-year period. If the deposit returns are not expected to change, which location should be selected?. Justify your answer using PW method. Second: [3] Alpha Construction just purchased a new track hoe attachment costing $12,500. The CEO, Ali, expects the implement will be used for five years when it is estimated to have a salvage value of $4,000. Maintenance costs are estimated to be $0 the first year and will increase by $100 each year thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of the implement?
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