Question

A city is planning to install an 84-inch transmission main to transport 300 million liters per day of treated water from a water treatment plant to the city's main reservoir. There are two alternatives for the installation of the proposed water main: open trench (OT) for a length of 10 km or a combination of trenching and bore tunneling (TT) for a length of 9 km. These two options are mutually exclusive and the selected alternative is expected to serve for a 50-year useful life. Using the information in the table below, and at a discount rate of 3.5%, which alternative should the city select?

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