Question 4 a) What is capitalised cost method? b) In the formula P = A * C for calculating the capitalized cost of providing unity now and every "n" years to infinity, what is the formulae for Cn? c) A town built on a river is considering building an additional bridge across the river. Two proposals have been put forward for bridges at different sites. The costs of each proposal are summarised as follows: Bridge A $65000 $35000 $1500 $1300 Initial cost of bridge Initial cost of road works Annual maintenance of bridge Annual maintenance of roads Life of bridge 60 years Life of roads 60 years With the cost of capital at 10%, which proposal should be adopted? Evaluation of the proposals is to be carried out by the comparison of their capitalised cost. Bridge B $50000 $30000 $1900 $1250 30 years 60 years