Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 2P
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Question
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa798df61-471d-4339-be19-0154284ed5ff%2F8e2b4b80-3812-46e2-a37e-579186c96145%2F70cdy9e_processed.png&w=3840&q=75)
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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