A new highway is to be constructed. Design A calls for a concrete pavement costing P3600 per foot with a 20-year life; two paved ditches costing P120 per foot each; and three box culverts every mile, each costing P360,000 and having a 20-year life. Annual maintenance will cost P72,000 per mile; the culverts must be cleaned every five years at a cost of P18,000 each per mile. Design B calls for a bituminous pavement costing P1800 per foot with a 10-year life; two sodded ditches costing P60 per foot each; and three pipe culverts every mile, each costing P90,000 and having a 10-year life. The replacement culverts will cost P96,000 each. Annual maintenance will cost P108,000 per mile; the culverts must be cleaned yearly at a cost of P9000 each per mile; and the annual ditch maintenance will cost P60 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 1/1 20-year period. Find the most economical design on the basis of AW and PW if the MARR is 6% pe.
A new highway is to be constructed. Design A calls for a concrete pavement costing P3600 per foot with a 20-year life; two paved ditches costing P120 per foot each; and three box culverts every mile, each costing P360,000 and having a 20-year life. Annual maintenance will cost P72,000 per mile; the culverts must be cleaned every five years at a cost of P18,000 each per mile. Design B calls for a bituminous pavement costing P1800 per foot with a 10-year life; two sodded ditches costing P60 per foot each; and three pipe culverts every mile, each costing P90,000 and having a 10-year life. The replacement culverts will cost P96,000 each. Annual maintenance will cost P108,000 per mile; the culverts must be cleaned yearly at a cost of P9000 each per mile; and the annual ditch maintenance will cost P60 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 1/1 20-year period. Find the most economical design on the basis of AW and PW if the MARR is 6% pe.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education