A road between Fairbanks and Nome, Alaska will have a most likely construction EUAC of $ 260,000 per mile. Doubling this cost is considered to
A road between Fairbanks and Nome, Alaska will have a most likely construction EUAC of $ 260,000 per mile. Doubling this cost is considered to have a probability of 25% and cutting it by 25% is considered to have a probability of 20%. The state interest rate is 5% and the road should last 30 years before major reconstruction. Calculate the expected value of the EUAC per mile. a. $ 195,000 b.$ 260,000 C. $ 520,000 d.$ 312,000
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