Wood and steel structures are being considered for a foot bridge. The wooden structure requires a $10,000 first cost, annual painting and generalmaintenance is estimated to cost 1,800, a major overhaul will e required every 5 years and cost $3,500. The steel bridge will ost $25,000with annualupkeep estimated to cost $1,00,and only one overhaul il be regured in the 15th year and cost S6,00 The ste bridgewil ave a sahage value of$5,000 a th end of t i in 5 years. The wooden bridge will ave no salvage value at the end of 25 years,but an expense of S4,000wil be reguired toremove the structure. Using present worth comparison determine the best atemative. Interest is 10%Match each item to a choice:BETTTER ALTERNATIVEChoices:E Steel foot bridge for P35052E Stel foot bridge for P33280# Wooden foot bridge for P36742E Wooden foot bridge for P28130E Wooden foot bridge for P31588E Steel foot bridge for P26874

The capital budgeting is a technique that is used to evaluate the profitability of the project.

maintenance is estimated to cost 1,800, a major overhaul will b required every 5 years and cost $3,500. The steel bridge will cost $25,000 ith anua upkeep estimated to cost $1,000, and only one overhaul will be equired in the 15th year and cost $6,00.The stel bridge will hav a salvage value of $5,000a th end of t ifen yars.The wooden bridge wil have no sakage value t the end of 25 years but an expense of S400 wil be equred remove the structure. Using present worth comparison determine the best atemative Intrest s 10% Match each item to a choice BETTTER ALTERNATIVE Choices: E Stel fot rdge for P35052 E Steel foot bridge for P33280 E Wooden foot bridge for P36742

maintenance is estimated to cost 1,800, a major overhaul will b required every 5 years and cost $3,500. The steel bridge will cost $25,000 ith anua upkeep estimated to cost $1,000, and only one overhaul will be equired in the 15th year and cost $6,00.The stel bridge will hav a salvage value of $5,000a th end of t ifen yars.The wooden bridge wil have no sakage value t the end of 25 years but an expense of S400 wil be equred remove the structure. Using present worth comparison determine the best atemative Intrest s 10% Match each item to a choice BETTTER ALTERNATIVE Choices: E Stel fot rdge for P35052 E Steel foot bridge for P33280 E Wooden foot bridge for P36742

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

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Similar questions

A bridge design firm is performing an economic analysis of two mutually exclusive designs forahighway overpass. The steel girder option has an initial cost of $2.13 million, and the concreteoption has an initial cost of $2.41 million. Every 25 years, the steel bridge must be painted at a costof $610,000, and all other maintenance costs are the same for both options. The steel bridge isexpected to last 50 years, and concrete bridge is expected to last 75 years. Both are assumed to beidentically replaced indefinitely. Based on the shortest acceptable analysis period for each option,determine the equivalent uniform annual cost (EUAC) for the best option using an interest rate of8%. Express your answer in $ to the nearest $1,000.
A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 24 years. Annual maintenance costs for the new bridge are estimated to be $24,000. People will be charged a toll of $0.29 per car to use the new bridge. Annual car traffic is estimated at 390,000 cars. The cost of collecting the toll consists of annual salaries for six collectors at $10,000 per collector. The existing bridge can be refurbished for $1,300,000 and would need to be replaced in 24 years. There would be additional refurbishing costs of $75,000 every five years and regular annual maintenance costs of $22,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 12% per year, what is the maximum acceptable cost (X) of the new bridge?
A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 24 years. Annual maintenance costs for the new bridge are estimated to be $25,000. People will be charged a toll of $0.29 per car to use the new bridge. Annual car traffic is estimated at 390,000 cars. The cost of collecting the toll consists of annual salaries for six collectors at $12,000 per collector. The existing bridge can be refurbished for $1,400,000 and would need to be replaced in 24 years. There would be additional refurbishing costs of $75,000 every five years and regular annual maintenance costs of $21,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 15% per year, what is the maximum acceptable cost (X) of the new bridge? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. Choose the correct answer below. A. The maximum acceptable cost of the new bridge is $976,079. O B.…
A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $24,000. People will be charged a toll of $0.25 per car to use the new bridge. Annual car traffic is estimated at 400,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $10,000 per collector. The existing bridge can be refurbished for $1,600,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $70,000 every five years and regular annual maintenance costs of $20,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 12% per year, what is the maximum acceptable cost (X) of the new bridge? (11.2)(a) $1,943,594 (b) $2,018,641 (c) $1,652,425 (d) $1,570,122 (e) $2,156,209
A highway bridge is being considered for replacement. The new bridge would cost $X and would last for 24 years. Annual maintenance costs for the new bridge are estimated to be $26,000. People will be charged a toll of $0.24 per car to use the new bridge. Annual car traffic is estimated at 380,000 cars. The cost of collecting the toll consists of annual salaries for six collectors at $12,000 per collector. The existing bridge can be refurbished for $1,600,000 and would need to be replaced in 24 years. There would be additional refurbishing costs of $65,000 every five years and regular annual maintenance costs of $23,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Choose the correct answer below. A. The maximum acceptable cost of the new bridge is $1,007,125. B.…
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 3600 per foot with a 20-year life, two paved ditches costing 120 per foot each and three box culverts every mile, each costing 360,000 and having a 20-year life. Annual maintenance will cost 72,000 per mile, the culverts must be cleaned every five years at a cost of 18,000 each per mile. Design B calls for a bituminous pavement costing 1800 per foot with a 10-year life, two sodded ditches costing 60 per foot each, and three pipe culverts every mile, each costing 90,000 and having a 10-year life. The replacement culverts will cost 96,000 each. Annual maintenance will cost 108,000 per mile, the culverts must be cleaned yearly at a cost of 9000 each per mile, and the annual ditch maintenance will cost 60 per foot per ditch. Compare the two designs on the basis of equivalent worth per mile for a 20-year period. Find the most economical design on the basis of Annual Worth and Present Worth if the Minimum…
In building a highway, the district engineer is faced with the alternatives of building a four-lane underpass that would take care of all future needs of building a two-lane underpass now and a second two-lane underpass 20 years later. The four-lane underpass would cost 400,000 and has a maintenance cost of 10,000 per year during the 40 years it is expected an underpass will be needed. The two-lane underpass will cost 270,000 each and each would have a maintenance cost of 8,000 per year. if financing costs are 5%, which alternative should be adopted and compute the difference of its equivalent present worth. assume zero salvage value for each alternative at the end of 40 years. Use present worth method.
Atoll bridge across the Mississippi River is being considered as a replacement for the current 1-40 bridge linking Tennessee to Arkansas. Because this bridge if approved, will become a part of the US Interstate Highway system, the B-C ratio method must be applied in the evaluation Investment costs of the structure are estimated to be $17,000,000, and $317.000 per year in operating and maintenance costs are anticipated. In addition, the bridge must be resurfaced every fith year of its 25-year projected life at a $1,130.000 per occumence (ho resurfacing cost in year 25) Revenues generated from the toll are anticipated to be $2,200,000 in its first year of operation, with a projected annual rate of increase o 1.75% per year due to the anticipated annual increase in traffe across the bridge. Assuming zero market (salvage) value for the bridge at the end of 25 years and a MARR of 8% per year, should the tall bridge be constructed? Alse, assume that the vial eurtacing of the bridge is…
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $426,000, and annual maintenance costs are estimated to be $6,400 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $180,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $17,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value. Determine the preferred alternative based on a present worth analysis with a MARR of 20%/year.
Two designs are suitable for housing track and field events. Design N costs $800,000 with annual upkeep costs including maintenance, repair, heat, and janitor service, of $25,000 a year. Its life is expected to be permanent. Design T costs $450,000 with annual upkeep costs for the previous items of $35,000 a year. However, with this design, repairs costing $15,000 will be required every 5 years, and the life will be 25 years with a probable salvage at that date of $50,000. The minimum required rate of return is 10%. Use present worth analysis to compare these two alternatives.
A regional infrastructure building and maintenance contractor must decide to buy a new compact horizontal directional drilling (HDD) machine now, or wait and buy it 2 years from now when the a large pipeline contract will require the new equipment. The HDD machine will include an innovative pipeloader designand maneuverable undercarriage system. The cost of the system is $68,000 if purchased nowor an estimated $81,000 if purchased 2 years from now. At i = 12% per year and f = 5% per year Determine if the contractor should buy now or later: Without any adjustment for inflation With inflation considered

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