Problem 1: Given: You are the city engineer and wish to determine the estimated life-cycle costs for the construction and maintenance of a road system assuming a 25-year service life. The initial cost of the project is $2M. Annual maintenance costs are estimated to be $50,000 throughout the life of the project. Assume 5% MARR and no salvage value throughout the analysis period. However, you are uncertain about the variables controlling life-cycle costs.

1. Conduct a sensitivity analysis of the present worth life-cycle cost of the road system considering the error in estimating Initial cost, annual maintenance cost, service life, and MARR is within +/- 20% of the original estimates. Plot the results considering the range of error for each variable.
2. Rank order the sensitivity of each variable affecting the estimated present worth life-cycle cost from highest to lowest.