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A new highway is to be constructed with two alternative designs. Design A calls for a...

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Economics

A new highway is to be constructed with two alternative designs.Design A calls for a concrete pavement costing $90 per foot with a20-year life; two paved ditches costing $3 per foot each; and threebox culverts every mile, each costing $9,000 and having a 20-yearlife. Annual maintenance will cost $1,800 per mile; the culvertsmust be cleaned every five years at a cost of $450 each per mile.Design B calls for a bituminous pavement costing $45 per foot witha 10-year life, two sodded ditches costing $1.50 per foot each; andthree pipe culverts every mile, each costing $2,250 and having a10-year life. The replacement culverts will cost $2,400 each.Annual maintenance will cost $2,700 per mile; the culverts must becleaned yearly at a cost of $225 each per mile; and the annualditch maintenance will cost $1.50 per foot per ditch. Compare thetwo designs using equivalent worth per mile for a 20-year period.Find the most economical design if the MARR is 6% per year.

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AnswerGiventhatA new highway is to constructed with two alternative designsStart design A in which all components have a life of 20 years Now the capital investment for this design will beConcrete pavement 90 ft5280 ft min 475200 milePaved ditches 23 ft5280 ft min 31680 mileBox culverts 3 culverts mile9000 min 27000 mileTherefore the total capital investment will becomeTotal    See Answer
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