Three transportation projects have been proposed to increase the safety in and around a residential neighborhood. Each project consists of upgrading existing street signing to highly retroreflective sheeting to increase visibility. The following table shows the initial construction costs, annual operating costs, useful life of the sheeting, and the salvage values for each alternative. Assume that the discount rate is 8%. Calculate the present worth for each alternative and determine the preferred project based on the economic criteria.Discount Rate: 8% ### Construction Alternatives ComparisonThe table below provides a comparison of three construction alternatives with respect to their initial costs, ongoing maintenance costs, useful life, and salvage values.| **Alternative** | **Initial Construction Cost ($)** | **Annual Operations and Maintenance Costs ($)** | **Useful Life (years)** | **Salvage Value ($)** ||-----------------|----------------------------------|-------------------------------------------------|-------------------------|-----------------------|| 1 | 19,000 | 2,500 | 10 | 3,000 || 2 | 8,000 | 4,000 | 5 | 900 || 3 | 20,000 | 2,500 | 10 | 4,600 |#### Key Considerations:1. **Alternative 1:** - **Initial Cost:** $19,000 - **Annual Maintenance Costs:** $2,500 - **Useful Life:** 10 years - **Salvage Value:** $3,0002. **Alternative 2:** - **Initial Cost:** $8,000 - **Annual Maintenance Costs:** $4,000 - **Useful Life:** 5 years - **Salvage Value:** $9003. **Alternative 3:** - **Initial Cost:** $20,000 - **Annual Maintenance Costs:** $2,500 - **Useful Life:** 10 years - **Salvage Value:** $4,600#### Analysis Overview:- **Cost Efficiency:** Alternative 2 has the lowest initial cost but a higher annual maintenance cost and a shorter lifespan.- **Long-Term Viability:** Alternatives 1 and 3 offer a longer useful life of 10 years.- **Salvage Value:** Alternative 3 provides the highest salvage value at the end of its useful life. This comparison helps in evaluating the long-term financial implications and operational feasibility of construction projects.

For alternative 1: calculation of capital recovery factor and present worth factor:…

Answered: Salvage Value ($) Alternative Initial…

Structural Analysis

6th Edition

ISBN:9781337630931

Author:KASSIMALI, Aslam.

Publisher:KASSIMALI, Aslam.

Chapter2: Loads On Structures

Section: Chapter Questions

Problem 1P

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Three transportation projects have been proposed to increase the safety in and around a residential neighborhood. Each project consists of upgrading existing street signing to highly retroreflective sheeting to increase visibility. The following table shows the initial construction costs, annual operating costs, useful life of the sheeting, and the salvage values for each alternative. Assume that the discount rate is 8%. Calculate the present worth for each alternative and determine the preferred project based on the economic criteria.

Discount Rate: 8%

### Construction Alternatives Comparison

The table below provides a comparison of three construction alternatives with respect to their initial costs, ongoing maintenance costs, useful life, and salvage values.

| **Alternative** | **Initial Construction Cost ($)** | **Annual Operations and Maintenance Costs ($)** | **Useful Life (years)** | **Salvage Value ($)** |
|-----------------|----------------------------------|-------------------------------------------------|-------------------------|-----------------------|
| 1 | 19,000 | 2,500 | 10 | 3,000 |
| 2 | 8,000 | 4,000 | 5 | 900 |
| 3 | 20,000 | 2,500 | 10 | 4,600 |

#### Key Considerations:

1. **Alternative 1:**
- **Initial Cost:** $19,000
- **Annual Maintenance Costs:** $2,500
- **Useful Life:** 10 years
- **Salvage Value:** $3,000

2. **Alternative 2:**
- **Initial Cost:** $8,000
- **Annual Maintenance Costs:** $4,000
- **Useful Life:** 5 years
- **Salvage Value:** $900

3. **Alternative 3:**
- **Initial Cost:** $20,000
- **Annual Maintenance Costs:** $2,500
- **Useful Life:** 10 years
- **Salvage Value:** $4,600

#### Analysis Overview:

- **Cost Efficiency:** Alternative 2 has the lowest initial cost but a higher annual maintenance cost and a shorter lifespan.
- **Long-Term Viability:** Alternatives 1 and 3 offer a longer useful life of 10 years.
- **Salvage Value:** Alternative 3 provides the highest salvage value at the end of its useful life.

This comparison helps in evaluating the long-term financial implications and operational feasibility of construction projects.

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