Asphalt Concrete Capital investment Annual maintenance $2,000 Life of roadway $800,000 $1,100,000 $1,000 10 years 18 years

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 2P
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A one-mile section of a roadway in Florida has been washed out by heavy rainfall. The county is considering two options for rebuilding the road. Pertinent data are presented below. If the county’s MARR for this type of project is 5% per year, which replacement option should be chosen? State
your assumptions.

Asphalt Concrete
Capital investment
Annual maintenance $2,000
Life of roadway
$800,000 $1,100,000
$1,000
10 years 18 years
Transcribed Image Text:Asphalt Concrete Capital investment Annual maintenance $2,000 Life of roadway $800,000 $1,100,000 $1,000 10 years 18 years
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