Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 6

Two options are available for setting up a wireless meter scanner and controller. A simple setup is good for 2 years and has an initial cost of $12,000, no salvage value, and an operating cost of $27,000 per year. A more permanent system has a higher first cost of $73,000, but it has an estimated life of 6 years and a salvage value of $15,000. It costs only $14,000 per year to operate and maintain. If the two options are compared using an incremental rate of return, what are the incremental cash flows in
a) year 0 and b) year 2