A “greenway” walking trail has been proposed by the city of Richmond. Two mutually exclusive alternative locations for the 2-meter-wide trail have been proposed: one is on flat terrain and is 14 kilometers in length, and the other is in hilly terrain and is 12 kilometers in length. Planning and site preparation cost is 20% of the asphalt-paving cost, which is $3.00 per square meter. Annual maintenance for the flat terrain trail is 5% of thepaving cost, and annual maintenance for the hilly trail is 8% of the paving cost. If the city’sMARR is 6% per year and perpetual life of the trail is assumed, which trail should be recommended to minimize the capitalized cost of this project?
A “greenway” walking trail has been proposed by the city of Richmond. Two mutually exclusive alternative locations for the 2-meter-wide trail have been proposed: one is on flat terrain and is 14 kilometers in length, and the other is in hilly terrain and is 12 kilometers in length. Planning and site preparation cost is 20% of the asphalt-paving cost, which is $3.00 per square meter. Annual maintenance for the flat terrain trail is 5% of the
paving cost, and annual maintenance for the hilly trail is 8% of the paving cost. If the city’sMARR is 6% per year and perpetual life of the trail is assumed, which trail should be recommended to minimize the capitalized cost of this project?
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