&Problem 10-8 (algorithmic) Question Help * Atoll bridge across the Mississippi River is being considered as a replacement for the current I-40 bridge linking Tennessee to Arkansas. Because this bridge, if approved, will become a part of the U.S. Interstate Highway system, the B-C ratio method must be applied in the evaluation. Assume that the initial surfacing of the bridge is included in the initial investment costs of the structure. a. What is the capitalized worth of the bridge (for the new design)? a. Calculate the CW value of the bridge for the new design. CW(8%)-SLI million (Round to three decimal places.) %) Problem 10-8 (algorithmic) Question Help b. Determine the B-C ratio of the bridge over an infinite time horizon (for the new design). c. Should the initial design or the new design be selected? Click the icon to view the additional information about the initial and new designs. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. a. Calculate the CW value of the bridge for the new design. CW(8%)-SL million (Round to three decimal places.) Investment costs of the structure are estimated to be $19,000,000, and $313,000 per year in operating and maintenance costs are anticipated. In addition, the bridge must be resurfaced every sixth year of its 24-year projected life at a cost of $1,190,000 per occurrence (no resurfacing cost in year 24). Revenues generated from the toll are anticipated to be $3,000,000 in its first year of operation, with a projected annual rate of increase of 2% per year due to the anticipated annual increase in traffic across the bridge. Assume that market (salvage) value for the bridge at the end of 24 years is zero and a MARR is 8% per year. New design Suppose that the toll bridge can be redesigned such that it will have a (virtually) infinite life. Revised costs and revenues (benefits) are given as follows: Capital investment: $22,400,000 Annual operating and maintenance costs: $244,000 Resurface cost every sixth year: $900,000 Structural repair cost, every 22th year: $1,850,000 Revenues (treated as constant, no rate of increase): $2,810,000 MARR remains at 8% per year. 100000000000000000000000000000 " Fo 100000000000000000000000000000 P9753 01233|45566|7 7 7 8 8|89999 71 77 05 52 19 03 02 17 45 3 2 1-1 1 1 1 2-2 2 2 2 333344|55566 10 14 21 N1 2 3 4 5-6 7 8 9 10 1 2 3 4 567890223 24 235 40 45 50 &Problem 10-8 (algorithmic) Question Help * Atoll bridge across the Mississippi River is being considered as a replacement for the current I-40 bridge linking Tennessee to Arkansas. Because this bridge, if approved, will become a part of the U.S. Interstate Highway system, the B-C ratio method must be applied in the evaluation. Assume that the initial surfacing of the bridge is included in the initial investment costs of the structure. a. What is the capitalized worth of the bridge (for the new design)? a. Calculate the CW value of the bridge for the new design. CW(8%)-SLI million (Round to three decimal places.) %) Problem 10-8 (algorithmic) Question Help b. Determine the B-C ratio of the bridge over an infinite time horizon (for the new design). c. Should the initial design or the new design be selected? Click the icon to view the additional information about the initial and new designs. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. a. Calculate the CW value of the bridge for the new design. CW(8%)-SL million (Round to three decimal places.) Investment costs of the structure are estimated to be $19,000,000, and $313,000 per year in operating and maintenance costs are anticipated. In addition, the bridge must be resurfaced every sixth year of its 24-year projected life at a cost of $1,190,000 per occurrence (no resurfacing cost in year 24). Revenues generated from the toll are anticipated to be $3,000,000 in its first year of operation, with a projected annual rate of increase of 2% per year due to the anticipated annual increase in traffic across the bridge. Assume that market (salvage) value for the bridge at the end of 24 years is zero and a MARR is 8% per year. New design Suppose that the toll bridge can be redesigned such that it will have a (virtually) infinite life. Revised costs and revenues (benefits) are given as follows: Capital investment: $22,400,000 Annual operating and maintenance costs: $244,000 Resurface cost every sixth year: $900,000 Structural repair cost, every 22th year: $1,850,000 Revenues (treated as constant, no rate of increase): $2,810,000 MARR remains at 8% per year. 100000000000000000000000000000 " Fo 100000000000000000000000000000 P9753 01233|45566|7 7 7 8 8|89999 71 77 05 52 19 03 02 17 45 3 2 1-1 1 1 1 2-2 2 2 2 333344|55566 10 14 21 N1 2 3 4 5-6 7 8 9 10 1 2 3 4 567890223 24 235 40 45 50
