4.The Indiana Highway Department wants to construct a new ruralhighway. The engineering team is considering two designs:
a. Design A calls for a concrete pavement costing $90/ft. witha 20-year life, two paved ditches each costing $3/ft., three boxculverts each costing $9,000/mile, annual maintenance costs of$1,800/mile, culvert cleaning costs of $450/mile every five years.Design A has a 20-year life.
b. Design B calls for a bituminous pavement costing $45/ft.with a 10-year life, two sodded ditches each costing $1.50/ft.,three pipe culverts each costing $2,250/mile with a 10-year life,replacement culverts will cost $2,400 each, annual maintenancecosts of $2,700/mile, culvert cleaning cost of $225/mile everyyear, and annual ditch maintenance costs of $3/ft.
Compare the two designs on the basis of equivalent worth permile for a 20-year period. The interest rate is 6%.
