Answered step by step
Verified Expert Solution
Question
1 Approved Answer
give correct option A city has signed a contract with a builder to construct a bridge to reduce the traffic congestion into the downtown core
give correct option
A city has signed a contract with a builder to construct a bridge to reduce the traffic congestion into the downtown core area. The nature of this contract is following the BOT (Build, Operate, and Transfer) concept. The builder will build the bridge, operate the bridge for 20 years by collecting tolls, and transfer the bridge back to the city at the end of the 20 years. The builder estimated that the construction of this bridge will cost $125 million today and the annual net revenue (tolls collected minus maintenance expense) is estimated to be $50 million per year (which remains the same for 20 years). For the builder, what is the payback period for the bridge project? Assume both the tolls collected and the maintenance expenses paid occurred throughout the year. 2.0 Years 2.5 Years 3.0 Years 3.5 Years 4.0 Years Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started