determine whether the increased life of the steel pole justifies its increased cost.

(Ch9) Two designs have been proposed for lighting your parking lot. The two options are

similar except in the type of pole that will be used. Option 1 uses wood poles which will cost

$6000 each and will last for twelve years with no salvage value. Option 2 uses steel poles

which cost $11,000 each, will last 24 years and will have $200 salvage value. Use an

interest rate of 8% and determine whether the increased life of the steel pole justifies its

increased cost. Show all work.