Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Local Government is considering building a new bridge. There are three options under consideration. The below table summarises the predicted financial information for

  

The Local Government is considering building a new bridge. There are three options under consideration. The below table summarises the predicted financial information for each bridge type, including how many cars are expected to use the bridge each year and the toll that cars will need to pay the government to travel along the bridge. At the end of the bridge's useful life, the government will incur a significant cost to replace the bridge. Which road is the most economical based on the Present Worth (PW) method and a MARR of 10%? Initial Investment Annual Expected Cars per year Toll revenue per car Disposal costs Useful Life ance Costs Road A $40,000,000 $130,000 500,000 $8.00 $9,000,000 20 years Road B $39,000,000 $190,000 500,000 $8.00 $13,000,000 20 years Road C $32,500,000 $160,000 500,000 $8.00 $21,000,000 20 years

Step by Step Solution

3.43 Rating (150 Votes )

There are 3 Steps involved in it

Step: 1

The detailed answer for the above question is provided below Road A PW Initial ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Economics and Strategy

Authors: Jeffrey M. Perloff, James A. Brander

1st edition

978-0137036059, 133379094, 321566440, 137036051, 9780133379099, 978-0321566447

More Books

Students also viewed these Accounting questions

Question

please try to give correct answer 2 2 3 . .

Answered: 1 week ago