A flexible pavement construction project is proposed. The estimated service life is 20 years. The initial cost is estimated at $205,000, and it would have a salvage value of $34,000 at the end of its useful life. The yearly maintenance is estimated at $2,505. What would be the present worth of life-cycle costs? What will be the user cost savings annually to justify the pavement construction ? Use interest rate of 5%.
A flexible pavement construction project is proposed. The estimated service life is 20 years. The initial cost is estimated at $205,000, and it would have a salvage value of $34,000 at the end of its useful life. The yearly maintenance is estimated at $2,505. What would be the present worth of life-cycle costs? What will be the user cost savings annually to justify the pavement construction ? Use interest rate of 5%.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3EA: If a copy center is considering the purchase of a new copy machine with an initial investment cost...
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A flexible pavement construction project is proposed. The estimated service life is 20
years. The initial cost is estimated at $205,000, and it would have a salvage value of
$34,000 at the end of its useful life. The yearly maintenance is estimated at $2,505.
What would be the present worth of life-cycle costs? What will be the user cost savings
annually to justify the pavement construction ? Use interest rate of 5%.
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