The Fox River is bordered on the east by Illinois Route 25 and on the west by Illinois Route 31. Along one stretch of the river, there is a distance of 16 miles between adjacent crossings. An additional crossing in this area has been proposed, and three alternative bridge designs are under consideration. Two of the designs have 25-year useful lives, and the third has a useful life of 35 years. Each bridge must be resurfaced periodically, and the roadbed of each bridge will be replaced at the end of its useful life, at a cost significantly less than initial construction costs. The annual benefits of each design differ on the basis of disruption to normal traffic flow along Routes 25 and 31. Given the information in Table P10-25, use the B€“C ratio method to determine which bridge design should be selected. Assume that the selected design will be used indefinitely, and use a MARR of 10% per year.

Table P10-25:

Transcribed Image Text:

Bridge Design Capital investment Annual maintenance cost* Resurface (every fifth year)* Resurface (every seventh year)* Bridge replacement cost Annual benefit Useful life of bridge (years)** $14,000,000 17,500 40,000 $17,000,000 $12,500,000 40,000 40,000 3,000,000 2,150,000 35 3,500,000 1,900,000 3,750,000 1,750,000 25 25 *Cost not incurred in last year of bridge's useful life. * Applies to roadbed only; structural portion of bridge has indefinite useful life.