A new highway is to be constructed. Design A calls for a concrete pavement costing $85 per foot with a 12-year life; two paved ditches costing $3 per foot each; and three box culverts every mile, each costing $7,000 and having a 12-year life. Annual maintenance will cost $1,600 per mile; the culverts must be cleaned every three years at a cost of $550 each per mile. Design B calls for a bituminous pavement costing $30 per foot with a 6-year life; three sodded ditches costing $1.70 per foot each; and four pipe culverts every mile, each costing $2,300 and having a 6-year life. The replacement culverts will cost $2,450 each Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $215 each per mile; and the annual ditch maintenance will cost $1.65 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 12-year period. Find the most economical design on the basis of AW and PW if the MARR is 8% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.

A new highway is to be constructed. Design A calls for a concrete pavement costing $85 per foot with a 12-year life; two paved ditches costing $3 per foot each; and three box culverts every mile, each costing $7,000 and having a 12-year life. Annual maintenance will cost $1,600 per mile; the culverts must be cleaned every three years at a cost of $550 each per mile. Design B calls for a bituminous pavement costing $30 per foot with a 6-year life; three sodded ditches costing $1.70 per foot each; and four pipe culverts every mile, each costing $2,300 and having a 6-year life. The replacement culverts will cost $2,450 each Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $215 each per mile; and the annual ditch maintenance will cost $1.65 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 12-year period. Find the most economical design on the basis of AW and PW if the MARR is 8% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A9.

calculate the AW and PW of both project A and project B

A new highway is to be constructed. Design A calls for a concrete pavement costing $85 per foot with a 12-year life; two paved ditches costing $3 per foot each; and three box culverts every mile, each costing $7,000 and having a 12-year life. Annual
maintenance will cost $1,600 per mile; the culverts must be cleaned every three years at a cost of $550 each per mile.
Design B calls for a bituminous pavement costing $30 per foot with a 6-year life; three sodded ditches costing $1.70 per foot each; and four pipe culverts every mile, each costing $2,300 and having a 6-year life. The replacement culverts will cost $2,450 each.
Annual maintenance will cost $2,600 per mile; the culverts must be cleaned yearly at a cost of $215 each per mile; and the annual ditch maintenance will cost $1.65 per foot per ditch.
Compare the two designs on the basis of equivalent worth per mile for a 12-year period. Find the most economical design on the basis of AW and PW if the MARR is 8% per year.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
The AW value for Design A is $ -68700 /mi. (Round to the nearest hundreds.)
The PW value for Design A is $/mi. (Round to the nearest hundreds.)

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