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Compare these two new alternate routes at an interest rate of 6 percent. Existing Alternate A Alternate B Life Cost Life Cost Life Cost

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Compare these two new alternate routes at an interest rate of 6 percent. Existing Alternate A Alternate B Life Cost Life Cost Life Cost R/W 8 0 $400,000 8 $1,000,000 Pavement Structure 5 yr $40,000 10 yr 100,000 20 yr 200,000 10 yr 50,000 20 yr 100,000 40 yr 500,000 Maintenance 20,000/yr 10,000/yr 50,000/yr User costs 1,000,000/yr 970,000/yr 850,000/yr Note: The annual cost of a capital asset with an infinite life is simply the cost of the interest payments. (Ans. Choose alternative B.)

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