Question
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
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