You may include a cash flow diagram in the space provided for each part of this question to guide your analysis. But it will not be awarded any marks. Also note that full marks will be awarded (a) A city is considering building a bridge which costs $10,000,000 to construct and an annual maintenance cost of $125,000. In addition, minor refurbishment is expected every five years at a cost of $150,000 per occurrence. At an interest rate of 8% per year, calculate the capitalized cost of the bridge. Assume that the bridge will last forever with continuous maintenance and minor refurbishment. (4 marks) (b) You borrowed $21,000 to finance the educational expenses for your senior year of college The loan will be paid off over five years. The loan carries an interest rate of 8% per year and is to be repaid in equal annual installments over five years. Assume that the money was borrowed at the beginning of your senior year and you have negotiated with the bank that the first installment will be due two years later. Compute the amount of the annual installments. (4 marks) (c) (i) Your company is planning to manufacture a new product which requires the purchase of a new machine. The cost of the machine is $10,000, and it has an operating life of 4 years. Its salvage value at the end of the 4th year is $1000. Calculate the capital recovery cost of the investment. Assume the MARR is 10%. (4 marks) (ii) If your company uses the machine for manufacturing, and the price of each unit of product produced is $12. What annual production units of the product would make the investment of the machine worthwhile? Provide brief explanation to your answer. (3 mar (d)The following table provides information of five mutually exclusive alternatives that have 20- year of useful lives. Explain the procedure to conduct the incremental analysis by constructing the necessary tables using the relevant information provided below. Which alternative is the best among the five alternatives? Assume MARR 6%. (5 marks) Capital investment Annual benefit IRR on total cash flow $4,000 639 15% Alternatives $6,000 761 11% $2,000 $1,000 $9,000 20% 10% 6% Increment | considered IRRA (A-B) | (B-D) | (C-B) | (C-A) | (A-D) | (E-A) 10% 29% 6% 2% -17% -5%