Chapter 18, Problem 13RQ

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 road can be paved with either asphalt or concrete. Concrete costs $15,000/km and lasts 20 years. What is the maximum that should be spent on asphalt if it only lasts 10 years? Annual maintenance costs for both pavements are $500/km. MARR = 12%. Demonstrate through real life examples a bridge management software you know.

The initial investment for constructing a median and guardrails for a prestressed concrete bridge is $1000000. Maintaining these facilities is expected to cost $2000 annually for the first five years of service and $10000 for the next five years of service. It is expected that these facilities will be rehabilitated at the end of the tenth year at a cost of $60000, after which the maintenance costs are expected to decrease to $6000 per year. What is equivalent uniform annual cost over a 15 -year period of service if the interest rate is 6% per year?