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QUESTION 2 The Road agency is planning to build a new bridge and is considering two distinct configurations. The initial costs and annual costs and
QUESTION 2 The Road agency is planning to build a new bridge and is considering two distinct configurations. The initial costs and annual costs and benefits for each bridge are shown in the following table. The bridges are each expected to give positive returns within 10 years and the rate of return expected 14%. Which would you choose and why. Alternative I Alternative II Initial cost $ 6,000,000.00 $ 10,500,000.00 Annual maintenance and operating $ 15,000.00 $ 10,000.00 costs Annual benefits $ 1,200,000.00 $ 1,900,000.00 Annual benefits less costs $ 1,185,000.00 $ 1,890,000.00
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