A proposed steel bridge has an indefinite life. The initial cost of the bridge is $3,750,000, and annual maintenance costs are estimated to be $25,000. The bridge deck will be resurfaced every 10 years for $900,000, and anticorrosion paint will be applied every 5 years for $250,000. If the interest rate is 8%, what is the EUAC? If 650,000 axles will cross the bridge each year, what approximate toll per axle should be charged? Give your answer to the nearest nickel.
A proposed steel bridge has an indefinite life. The initial cost of the bridge is $3,750,000, and annual maintenance costs are estimated to be $25,000. The bridge deck will be resurfaced every 10 years for $900,000, and anticorrosion paint will be applied every 5 years for $250,000. If the interest rate is 8%, what is the EUAC? If 650,000 axles will cross the bridge each year, what approximate toll per axle should be charged? Give your answer to the nearest nickel.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A proposed steel bridge has an indefinite life. The initial cost of the bridge is $3,750,000, and annual maintenance costs are estimated to be $25,000. The bridge deck will be resurfaced every 10 years for $900,000, and anticorrosion paint will be applied every 5 years for $250,000. If the interest rate is 8%, what is the EUAC? If 650,000 axles will cross the bridge each year, what approximate toll per axle should be charged? Give your answer to the nearest nickel.
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