please solve a and b , thank you!
A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $438,000. Alternative 2 - Two-stage construction: Start with a two-lane bridge now for $200,000 and widen to four lanes later when tratic justifies. The future cost of widening the bridge to four-lanes at that time will be $200,000 plus an extra $22,000 for every year that widening is delayed. For example, if future widening is done at the end of year 7 , the cost of widening at that time will be equal to $200,000 + 7($22,000)=$354,000. The following estimates have been made of when widening to a four-lane bridge will be required: PWmostlikely(6%)=$ thousand (Round to one decimal place.) PW optimstic(6%)=$ thousand (Round to one decimal place.) (b) Calculate the expected PW costs of Alfernative 2 using the "three-point estimation" technique Expected PW =\$ thousand (Round to one decimal place.) (c) Based on these estimates, which allernative is more economical? A. Alternative 1 B. Alernative 2 bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the ew road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future rffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being onsidered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $438,000. Alternative 2- Two-stage construction: Start with a two-lane bridge now for $200,000 and widen to four lanes later when traffic justifies. The future cost of widening the bridge to four-lanes at that time will be $200,000 plus an extra $22,000 for every year that widening is delayed. For example, if future widening is done at the end of year 7 , the cost of widening at that time will be equal to $200,000+7x($22,000)=$354,000. The following estimates have been made of when widening to a four-lane bridge will be required: In view of these estimates, which allemative would you recommend? The MARR used by the highway dopartment is 6% per year Click the icon to view the interest and annuity table for discrete compounding when the MARR is 6% per yoar. A bridge is to be constructed now as part of a new road. Engineers have determined that current traffic volume on the new road will justify a two-lane road and a bridge at the present time. Because of the uncertainty regarding future traffic, the time at which the additional two lanes will be required is currently being studied. Two alternatives are being considered. Alternative 1 - One-stage construction: Build a four lane bridge right now for $438,000. (a) Calculate the PW of costs for the different scenarios of Alternative 2 PWmostlikely(6%)=$ thousand (Round to one decimal place.) PWoptimistic(6%)=$ thousand (Round to one decimal place.) (b) Calculate the expected PW costs of Alternative 2 using the "three-point estimation" technique Expected PW =$ thousand (Round to one decimal place,) (c) Based on these estimates, which alternative is more economical? A. Alternative 1 B. Alternative 2 More Info
