In order to improve evacuation routes out of New Orleans in the event of another major disaster such as Hurricane Katrina, the Louisiana Department of Transportation (L-DoT) is planning to construct an additional bridge across the Mississippi River. The department uses an interest rate of 8% and plans a 50-year life for either bridge. Which design has the better present worth? All costs in SM Land acquisition Annual O & M Annual increase Major Maintenance (Year 25) Salvage Cost Initial Construction Bridge M $220 2 0.04 185 30 $585 Bridge L $195 3 0.03 210 27 $470

In order to improve evacuation routes out of New Orleans in the event of another major disaster such as Hurricane Katrina, the Louisiana Department of Transportation (L-DoT) is planning to construct an additional bridge across the Mississippi River. The department uses an interest rate of 8% and plans a 50-year life for either bridge. Which design has the better present worth? All costs in SM Land acquisition Annual O & M Annual increase Major Maintenance (Year 25) Salvage Cost Initial Construction Bridge M $220 2 0.04 185 30 $585 Bridge L $195 3 0.03 210 27 $470

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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