Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A proposed steel bridge has an indefinite life. The initial cost of the bridge is $ 3,750,000, and annual maintenance costs are estimated to be

A proposed steel bridge has an indefinite life. The initial cost of the bridge is $ 3,750,000, and annual maintenance costs are estimated to be $25,000. The bridge deck will be resurfaced every 10 years for $900,000, and anticorrosion paint will be applied every 5 years for $250,000. the interest rate is 8%.

PLEASE SHOW ALL WORK IN AS MUCH DETAIL AS POSSIBLE.

PART 1: Find the Capitalized cost

a) CC= 3.75M + 25K/0.08 + [900K (A/F,8%,10)]/0.08 + [250K (A/F,8%,5)]/0.08=5,371,562.5

b) CC= 3.75M + 25K/0.08 + [900K (A/P,8%,10)]/0.08 + [250K (A/P,8%,5)]/0.08=6,521,562.5

c) CC= 3.75M +( 25K+900K +250K)/0.08 = 18,437,500

d) CC=3.75M(0.08)+25K/0.08+[900K(A/F,8%,10)]/0.08+[250K(A/F,8%,5)]/0.08= $1,921,562.5

PART 2: Find the Annual Worth (AW)

a) AW=3.75M+25K+900K(A/F,8%,10)+250K(A/F,8%,5)= $153,725

b) AW= 3.75M(0.08) + 25K + 900K (A/P,8%,10) + 250K (A/P,8%,5)= $521,725

c) AW= 3.75M (0.08) + 25 K + 900K (A/F,8%,10) + 250K *(A/F,8%,5) = $429,725

d) AW= 3.75M (0.08) + 25 K + 900K/10+ 250K /5= $465,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing E4 Im

Authors: KNAPP

4th Edition

0324048602, 978-0324048605

More Books

Students also viewed these Accounting questions

Question

Explain the pages in white the expert taxes

Answered: 1 week ago

Question

5. Identify three characteristics of the dialectical approach.

Answered: 1 week ago

Question

7. Identify six intercultural communication dialectics.

Answered: 1 week ago