Two roadway designs are under consideration for access to a permanent suspension bridge. Design 1A will cost

Question:

Two roadway designs are under consideration for access to a permanent suspension bridge. Design 1A will cost $3 million to build and $100,000 per year to maintain. Design 1B will cost $3.5 million to build and $40,000 per year to maintain. Both designs are assumed to be permanent. Use an AWbased rate of return equation to determine

(a) The breakeven ROR,

(b) Which design is preferred at a MARR of 10% per year.

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...

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