A city is trying to decide whether to build a transfer station for its municipal solid waste. If built, the collection trucks will haul solid waste to the station for transfer to larger trucks, which will take the solid waste to a landfill. If the transfer station is not built, the collection vehicles will travel to the landfill directly, Cost data are provided in the table. Note that the transfer station must be rehabilitated after 25 years. The MARR is 7%.
| NoTS | TS |
Initial cost ($ million) | 0 | 30 |
Annual operating cost ($ million) | 4 | 2 |
Rehabilitation cost at 25 years ($ million) | 0 | 10 |
Life time (years) | 50 | 50 |
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