The Florida Department of Agriculture & Consumer Services is investigating two proposals for increasing the capacity of the drainage canal in an agricultural region.
i) Proposal A requires removing weeds and sediment that have accumulated during previous years. The dredging equipment costs $650,000 to purchase. The equipment is expected to have a 10-year life with a $17,000 salvage value. The annual operating costs are estimated to be $50,000. To control weeds in the canal, an additional $120,000 is required per year for the weed control program.
ii) Proposal B is to line the canal with concrete at an initial cost of $4 million. The lining is assumed to be permanent, but maintenance will be required at a cost of $5,000 each year. In addition, lining repairs will be made every 5 years at a cost of $30,000.