10-8. Refer back to Problem 10-7. Suppose that the toll bridge can be redesigned such that it will have a (virtually)

infinite life. MARR remains at 10% per year. Revised costs and revenues (benefits) are given as follows: (10.7, 10.9)

Capital investment: $22,500,000 Annual operating and maintenance costs: $250,000 Resurface cost every seventh year: $1,000,000 Structural repair cost, every 20th year: $1,750,000 Revenues (treated as constant—no rate of increase):

$3,000,000

a. What is the capitalized worth of the bridge?

b. Determine the B–C ratio of the bridge over an infinite time horizon.

c. Should the initial design (Problem 10-7) or the new design be selected?