A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-loan road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered.

Alternative 1- One-stage construction: Build a four lane bridge right now for $442,000.

Alternative 2- Two-stage construction: Start with a two-loan bridge now for $220,000 and widen to four lanes later when traffic justifies. The future cost of widening the bridge to four-lanes at that time will be equal to $220,000 + 4X(23,000)=$312,000. The following estimates have been made of when widening to a four-lane bridge will be required.

Pessimistic estimate=End of year 2

Most likely estimate= End of year 4

Optimistic estimate=End of year 7

every year that widening is delayed. For example, if future widening is done at the end of year 4, the cost of widening at that time will widening to a four-lane bridge will be required: Pessimistic estimate End of ye Most likely estimate End of ye Optimistic estimate End of ye In view of these estimates, which alternative would you recommend? The MARR used by the highway department is 9% per year (a) Calculate the PW of costs for the different scenarios of Alternative 2 PWpessimistic (9%) =$thousand (Round to one decimal place.) PW most likely (9%) = $ thousand (Round to one decimal place.) PW optimiste (9%) = $thousand (Round to one decimal place.) (b) Calculate the expected PW costs of Alternative 2 using the three-point estimation technique Expected PW = $thousand (Round to one decimal place.) (c) Based on these estimates, which alternative is more economical? A. Alternative 1 B. Alternative 2 O o O Atreyri 19 be conducted now part of a new mat trenera has crumined at current tante volume on the new road will justky a solarne road and bridge at the present time. Because of the uncertainty regarding Mater, me which the anal wows will be more being whated. Two seatives are being considered Allemave - One-stage contraction build a fourtante right now for $442.000 Amalive 2 - Toge construction Start with a bolange now for $220.000 and widen to four lanes te whenuatesThe fare cost of widening the age for lane at that time will be $220.000 plus andre 53.000 for way that woning is delayed for complete widening done at the end of your 4. the cost of widening at that time will be equal to $220.000 (525,000 $112.000. The following the been made of when widening to a fulanene will be red Pesme estimate End of year 2 Moortantly astmas End of year 4 Optimiste estimate End of your In view of the time, which seative would you recommend? The MAAR ned by the highway dearmanti per year al Calon