Question #4 (20 Points): A highway surface can be finished with concrete or asphalt. Concrete (which has a life of 20 years) will cost $4.6 million per mile. The basic maintenance costs for concrete and asphalt roadways average $980 and $1,500 per mile per year, respectively. The interest rate is 10% per year a) What is the maximum amount that can be spent on asphalt, if it lasts 10 years, to make the two options equivalent? b) Based on Part"a", if the asphalt will actually cost $3.5 million, should we select the finishing of our road to be concrete or asphalt? Please justify in just one sentence. Question 5 (20 Points): The cash flows associated with a certain project are shown below. Year 0 2 3 Costs S 20.000 10,000 15.000 15,000 Revenues 0 25,000 30.000 10,000 4 10,000 5,000 5 15.000 30,000 a) What is the number of possible i* values? Why? b) Determine the external rate of return using the MIRR method if the investment rate is 18% per year and the borrowing rate is 10% per year. Show your steps Question #4 (20 Points): A highway surface can be finished with concrete or asphalt. Concrete (which has a life of 20 years) will cost $4.6 million per mile. The basic maintenance costs for concrete and asphalt roadways average $980 and $1,500 per mile per year, respectively. The interest rate is 10% per year a) What is the maximum amount that can be spent on asphalt, if it lasts 10 years, to make the two options equivalent? b) Based on Part"a", if the asphalt will actually cost $3.5 million, should we select the finishing of our road to be concrete or asphalt? Please justify in just one sentence. Question 5 (20 Points): The cash flows associated with a certain project are shown below. Year 0 2 3 Costs S 20.000 10,000 15.000 15,000 Revenues 0 25,000 30.000 10,000 4 10,000 5,000 5 15.000 30,000 a) What is the number of possible i* values? Why? b) Determine the external rate of return using the MIRR method if the investment rate is 18% per year and the borrowing rate is 10% per year. Show your steps