A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $27,000. People will be charged a toll of $0.23 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $9,000 per collector. The existing bridge can be refurbished for $1,900,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $70,000 every five years and regular annual maintenance costs of $17,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Choose the correct answer below. O A. The maximum acceptable cost of the new bridge is $1,518,958. O B. The maximum acceptable cost of the new bridge is $2,223,884. OC. The maximum acceptable cost of the new bridge is $2,606,996.

A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $27,000. People will be charged a toll of $0.23 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $9,000 per collector. The existing bridge can be refurbished for $1,900,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $70,000 every five years and regular annual maintenance costs of $17,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. ... Choose the correct answer below. O A. The maximum acceptable cost of the new bridge is $1,518,958. O B. The maximum acceptable cost of the new bridge is $2,223,884. OC. The maximum acceptable cost of the new bridge is $2,606,996.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
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