Maintenance cost for small bridge with an expected 50 year life are estimated to be $10,000 each year for the first 5 years, followed by a $15,000 expenditure in the year 15 and a $12,000 expenditure in the year 30. If interest rate is at 8% compounded monthly a) What is the equivalent present value of the entire maintenance cost of that bridge? b) what is the equivalent uniform annual cost over the entire-50 year period?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Maintenance cost for small bridge with an expected 50 year life are estimated to be $10,000 each year for the first 5 years, followed by a $15,000 expenditure in the year 15 and a $12,000 expenditure in the year 30. If interest rate is at 8% compounded monthly

a) What is the equivalent present value of the entire maintenance cost of that bridge?

b) what is the equivalent uniform annual cost over the entire-50 year period?

 

 

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