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5-66 A railway branch line to a landfill site is to be constructed. It is expected that the rail- way line will be used for
5-66 A railway branch line to a landfill site is to be constructed. It is expected that the rail- way line will be used for 15 years, after which the land will be returned to agricultural use. The railway track and ties will be removed at that time. In building the railway line, either treated or untreated wood ties may be used. Treated ties have an installed cost of $6 and a 10-year life; untreated ties cost $4.50 with a six-year life. If at the end of 15 years the ties then in place have a remaining useful life of four years or more, they will be used by the railway elsewhere, and they have an estimated salvage value of $3 each. Any ties that are removed at the end of their service life or are too close to the end of their ser- vice life to be used elsewhere can be sold for $0.50 each. Determine the most economical plan for the initial railway ties and their replacement for the 15-year period. Make a present worth analysis assuming 8% interest
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