A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $360,000. Alternative 2 - Two-stage construction: Start with a two-lane bridge now for $170,000 and widen to four lanes later when traffic justifies. The future cost of widening the bridge to four-lanes at that time will be $170,000 plus an extra $23,000 for every year that widening is delayed. For example, if future widening is done at the end of year 7, the cost of widening at that time will be equal to $170,000 + 7x($23,000) = $331,000. The following estimates have been made of when widening to a four-lane bridge will be required: Pessimistic estimate Most likely estimate Optimistic estimate End of year 4 End of year 7 End of year 8

A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $360,000. Alternative 2 - Two-stage construction: Start with a two-lane bridge now for $170,000 and widen to four lanes later when traffic justifies. The future cost of widening the bridge to four-lanes at that time will be $170,000 plus an extra $23,000 for every year that widening is delayed. For example, if future widening is done at the end of year 7, the cost of widening at that time will be equal to $170,000 + 7x($23,000) = $331,000. The following estimates have been made of when widening to a four-lane bridge will be required: Pessimistic estimate Most likely estimate Optimistic estimate End of year 4 End of year 7 End of year 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

S
A bridge is to be constructed now as part of a new road. Engineers have determined that traffic density on the new road will justify a two-lane road and a bridge at the present time. Because of uncerta. regarding future use of the road, the time at which an extra two lanes will be required is currently being studied. The two-lane bridge will cost $210,000 and the four-lane bridge, it built initially, will cost $400,000. The future cost of widering a two-lane bridge to four lanes will be an extra $210,000 plus $23,000 for year that widening is delayed The MARR used by the highway department is 15% per year. The following estimates have been made of the times at which the four-lane bridge will be required: 4 years Pessimistic estimate Most likely estimate 5 years 9 years Optimistic estimate In view of these estimates, what would you recommend? List some advantages and disadvantages of this method of preparing estimates Click the icon to view the interest and annuity table for discrete…
A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $397,000. Alternative 2 - Two-stage construction: Start with a two-lane bridge now for $190,000 and widen to four lanes later when traffic justifies. The future cost of widening the bridge to four-lanes at that time will be $190,000 plus an extra $23,000 for every year that widening is delayed. For example, if future widening is done at the end of year 7, the cost of widening at that time will be equal to $190,000 + 7x($23,000) = $351,000. The following estimates have been made of when widening to a four-lane bridge will be required: Pessimistic…
The town council of Cato Springs is considering two alternative investments to upgrade and expand its spring-fed recreational area. The two investment alternatives (A and B) have different costs and will produce different public benefits. The projected costs and benefits over a 10-year planning horizon for the two alternatives are given below. Using a MARR of 7.0%, which, if either, of the alternatives should be pursued by the Cato Springs city council? CF (Benefits for Alt A) CF (Benefits for Alt EOY CF (Costs for Alt A) CF (Costs for Alt B) B) $7,590,000 $10,310,000 1 $2,240,000 $1,400,000 $3,360,000 $2,200,000 $400,000 $2,596,000 $600,000 $3,755,000 $600,000 $3,003,600 $800,000 $4,056,600 4 $800,000 $3,446,100 $1,000,000 $4,377,300 5 $1,000,000 $3,651,400 $1,200,000 $4,624,800 $1,200,000 $3,876,600 $1,400,000 $4,949,800 7 $1,400,000 $4,135,700 $1,600,000 $5,365,600 8 $1,600,000 $4,506,400 $1,800,000 $5,649,600 9 $1,800,000 $5,458,900 $2,000,000 $6,252,300 10 $2,000,000 $6,987,400…
Using exactly the same information from Problem No. 1 above, calculate the Annual Worth of Project Y at 8% per year interest rate. You can see the data in picture one, answer the problem in the second picture.
An industrial park is being planned near a river. The river occasionally floods, and as a result theindustrial park planners are trying to decide how large of an embankment to build as protection. Theembankment is expected to last 50 years. The MARR is 12%. If the water rises above theembankment (regardless how much) and flooding occurs, the cost is $300,000. Using the data below,find the expected annual costs in each case and determine which embankment height should beselected.Embankmentheight(meters)Initial Costof EmbankmentProbability of water rising aboveembankment in any given year2.0 $100,000 0.3302.5 $165,000 0.1253.0 $300,000 0.0403.5 $400,000 0.0204.0 $550,000 0.01 Please attach an actual excel file too.
1 - Assuming an interest rate of 3% per year (effective), calculate the feasibility of each option. You can use either Present Worth Analysis or Equivalent Uniform Worth Analysis. In this part, your calculation should be done without the use of Excel. Show your equations and the results. 2 - Using linear interpolation, calculate the rate of return for each option. Here, your calculation should be implemented using Excel. 3 - Assuming that the initial equipment can be depreciated over the course of 20 years and usingDouble Decline Balance Depreciation, calculate the depreciation schedule for the equipment. 4- Assume a state income tax of 5%. Calculate the after-tax cashflow for each option assuming the depreciation used. Use only the depreciation on question 2.
A factory needs to increase its facilities and study two alternatives:Alternative 1: Construction of a reinforced concrete shed at a price of $5 million and a useful life of 40 years. The demolition cost $200,000 and its annual maintenance cost is $100,000.Alternative 2: Construction of a masonry shed at a cost of $3 million and a useful life of 40 years with an expected renovation of $2 million at the end of 20 years and a salvage value of $100,000. The annual maintenance cost is $150,000.Considering a TMAR of 20% per year, what is the best alternative?
Three mutually exclusive alternatives A, B and C have a service life of 8 years each and the following data: AW of alternative A= $35,000, PW of B $200,000, and FW of C= $350,000. At an MARR of 10%, which alternative should be selected? Select one: O a. Alternatives C O b. Alternatives B O C. Alternatives A
Asap
1)
4.3. Use ERR analysis to determine which alternative would be the best economical choice. Verify your decision with NPC analysis. Assume the MARR equals 10%. Alternative A: -500 -25 -25 -25 -25 L = 100 Alternative B: 1 3 -300 -50 -50 -50 -50 L= 25 Alternative C: 2 3 -250 -75 -60 -45 -30 L= 10 Alternative D: 2 450 -35 -35 -35 -35 L= 100