Burbank Drive is being widened with two new lanes constructed adjacent to the existing roadway. Your client is undecided whether to use a concrete pavement or an asphalt pavement. Each alternative is expected to have a 40 year life, at which time it has no remaining value. Given the following estimated information, compute the present cost of asphalt pavement. Assume a 4% interest rate. Maintenance costs are given for that future year. Round your answer to the nearest $1,000.

a) New 10 asphalt pavement on a 4 stone base and 8 soil-cement base

Initial construction cost = $1,957,000

In year 15, the roadway will be cold planed and overlaid = $550,000

In year 30, the roadway will again be cold planed and overlaid = $550,000

Select one:

a. $3,057,000

b. $2,432,000

c. $1,957,000

d. $2,093,000