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Answer with good explanation will be upvoted. thanks For the question below, assume that all dollar amounts have already been corrected for inflation. Thus, any
Answer with good explanation will be upvoted. thanks
For the question below, assume that all dollar amounts have already been corrected for inflation. Thus, any change in value of money over time is due only to opportunity cost (which is reflected in the discount rate). 2. The figure below presents the proposed cash flow for a major expressway bridge in a certain state. The plan is to toll the bridge 5 years after it is constructed, for a 10-year period. Is the proposal feasible from a viewpoint of economic efficiency? The discount rate is 4% with a 0.85 probability, 5% with 0.10 probability, and 6% with 0.05 probability. (Round off the expected value of the discount rate to the nearest whole number). Rehab done at 30 years. Initial costs 10 Years of tolling revenue Major rehabilitation Salvage value $10M - $30M + $5M/yr for 10 years + $2M 0 5 6 7 8 9 10 11 12 13 14 15 40 yrsStep by Step Solution
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