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Question 3 (3 MARKS) The NSW Government is considering building a new highway. There are three options under consideration. The below table summarises the predicted
Question 3 (3 MARKS) The NSW Government is considering building a new highway. There are three options under consideration. The below table summarises the predicted financial information for each road, including how many cars are expected to use the road each year and the toll that cars will need to pay the government to travel along the highway. At the end of the highway's useful life, the government will incur a significant cost to replace the road. Which road is the most economical based on the Annual Worth (AW) method and a MARR of 12%? Initial Investment Annual Maintenance Costs Expected Cars per year Toll revenue per car Disposal costs Useful Life Road A $30,000,000 $120,000 450,000 $8.00 $8,000,000 Road B $29,000,000 $180,000 450,000 $8.00 $12,000,000 Road C $27,500,000 $150,000 450,000 $8.00 $20,000,000 20 years 20 years 20 years
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