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Civil Engineering
A secondary road in a developing country, 30 miles long, is to be improved by surface treating the gravel surface without any change in length. The cost of the improvement is estimated at $150,000 per mile. A present annual transport cost for all traffic on the existing road (vehicle operating cost, maintenance cost, etc.) is estimated at $205,000 per mile. After improvement, this is expected to reduce to $170,000 per mile per annum. Reconstruction takes place in two years with equal expenditures in each year. Assume that in the second year of construction, transport cost on the improved road is equivalent to present costs in half the length and new transport cost on the other half. Would you undertake the project? (The minimum attractive rate of return (MARR) is 8.5% and the project life is 20 years after reconstruction.) Resealing would be required 10 years after reconstruction at a cost of $55,000 per mile. Use the net present worth method

A secondary road in a developing country, 30 miles long, is to be improved by surface treating the gravel surface without any change in length. The cost of the improvement is estimated at $150,000 per mile. A present annual transport cost for all traffic on the existing road (vehicle operating cost, maintenance cost, etc.) is estimated at $205,000 per mile. After improvement, this is expected to reduce to $170,000 per mile per annum. Reconstruction takes place in two years with equal expenditures in each year. Assume that in the second year of construction, transport cost on the improved road is equivalent to present costs in half the length and new transport cost on the other half. Would you undertake the project? (The minimum attractive rate of return (MARR) is 8.5% and the project life is 20 years after reconstruction.) Resealing would be required 10 years after reconstruction at a cost of $55,000 per mile. Use the net present worth method

Traffic and Highway Engineering
Traffic and Highway Engineering
5th Edition
ISBN:9781305156241
Author:Garber, Nicholas J.
Publisher:Garber, Nicholas J.
Chapter2: Transportation Systems And Organizations
Section: Chapter Questions
Problem 3P
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A secondary road in a developing country, 30 miles long, is to be improved by surface treating the gravel surface without any change in length. The cost of the improvement is estimated at $150,000 per mile. A present annual transport cost for all traffic on the existing road (vehicle operating cost, maintenance cost, etc.) is estimated at $205,000 per mile. After improvement, this is expected to reduce to $170,000 per mile per annum. Reconstruction takes place in two years with equal expenditures in each year. Assume that in the second year of construction, transport cost on the improved road is equivalent to present costs in half the length and new transport cost on the other half. Would you undertake the project? (The minimum attractive rate of return (MARR) is 8.5% and the project life is 20 years after reconstruction.) Resealing would be required 10 years after reconstruction at a cost of $55,000 per mile. Use the net present worth method
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