A new 2-lane road is needed in a part of town that is growing. At some point the road will need 4 lanes to handle the anticipated traffic. If the city's optimistic estimate of growth is used, the expansion will be needed in 3 years. For the most likely and pessimistic estimates, the expansion will be needed in 6 and 10 years, respectively. The expansion will cost $4.9 million. Use an interest rate of 7%. (a) What is the PW for each scenario, and what is the range of values?

A new 2-lane road is needed in a part of town that is growing. At some point the road will need 4 lanes to handle the anticipated traffic. If the city's optimistic estimate of growth is used, the expansion will be needed in 3 years. For the most likely and pessimistic estimates, the expansion will be needed in 6 and 10 years, respectively. The expansion will cost $4.9 million. Use an interest rate of 7%. (a) What is the PW for each scenario, and what is the range of values?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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