23. The state highway department is considering six routes for a new highway. Listed are the estimated construction costs, maintenance costs, and the user cost associated with each route. Construction Annual Maintenance Annual Users Cost Route Costs per Kilometer Costs per Kilometer per Kilometer Al $1,500,000 $9,789 $450,000 A2 1,687,500 9,225 437,262 A3 1,875,000 8,682 427,104 A4 2,100,000 7,977 400,326 A5 2,250,000 6,639 370,524 A6 2,437,500 6,399 356,094 The life of the highway is expected to be 25 years with no salvage value. If the initial interest rate is 8%, which highway route is most desirable? a. b. C. Solve using incremental analysis. Solve using total investment analysis. Answer: A5 If the estimated costs are in constant dollars and the annual inflation rate is 8%, which route is favored? Answer: A6