A highway authority has decided to build a new toll bridge across a river, at a construction cost of $15 million. The construction costs are paid by selling bonds that pay 5% interest to the holders every year and are to be retired after 40 years. A sinking fund will be created with annual payments invested at 6% interest to generate money to pay the annual interest payments and pay the principal after year 40, with the first investment beginning at the end of year 1. The uniform annual O&M costs for the bridge are $500,000/year. It is expected that 5 million vehicles per year will use the toll bridge. 1. What should the toll $/vehicle be to repay the capital financing and O&M costs of the bridge? 2. After 5 years operation it was found that the vehicle traffic on the bridge averaged only 85% of the original estimated volume, so the full annual payment to the sinking fund was not made. The bridge owner has decided to raise the toll so that the owner can make the back payments to the sinking fund, and make the future annual payments to the sinking fund and pay annual interest and the principal after year 40. Assume that for each 10% increase in the toll, the vehicle volume will decrease by 1%. What should the new toll be? A highway authority has decided to build a new toll bridge across a river, at a construction cost of $15 million. The construction costs are paid by selling bonds that pay 5% interest to the holders every year and are to be retired after 40 years. A sinking fund will be created with annual payments invested at 6% interest to generate money to pay the annual interest payments and pay the principal after year 40, with the first investment beginning at the end of year 1. The uniform annual O&M costs for the bridge are $500,000/year. It is expected that 5 million vehicles per year will use the toll bridge. 1. What should the toll $/vehicle be to repay the capital financing and O&M costs of the bridge? 2. After 5 years operation it was found that the vehicle traffic on the bridge averaged only 85% of the original estimated volume, so the full annual payment to the sinking fund was not made. The bridge owner has decided to raise the toll so that the owner can make the back payments to the sinking fund, and make the future annual payments to the sinking fund and pay annual interest and the principal after year 40. Assume that for each 10% increase in the toll, the vehicle volume will decrease by 1%. What should the new toll be