Professional blog

Atoll bridge across the Mississippi River is being considered as a replacement for the current I-40 bridge linking Tennessee to Arkansas. Because this bridge, if approved, will become a part of the U.S. Interstate Highway system, the B-C ratio method must be applied in the evaluation. Assume that the initial surfacing of the bridge is included in the initial investment costs of the structure. a. What is the capitalized worth of the bridge (for the new design)? b. Determine the B-C ratio of the bridge over an infinite time horizon (for the new design) c. Should the initial design or the new design be selected? Click the icon to view the additional information about the initial and new designs. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. X a. Calculate the CW value of the bridge for the new design. More Info CW(12%)Smillion (Round to three decimal places.) Initial design Investment costs f the structure are estimated to be $18,700,000, and $321,000 per year in operating and maintenance costs are anticipated. In addition, the bridge must be resurfaced every fourth year of its 24-year projected life at a cost of $1,270,000 per occurrence (no resurfacing cost in year 24). Revenues generated from the toll are anticipated to be $2,800,000 in its first year of operation, with a projected annual rate of increase of 2% per year due to the anticipated annual increase in traffic across the bridge. Assume that market (salvage) value for the bridge at the end of 24 years is zero and a MARR is 12% per year New design Suppose that the toll bridge can be redesigned such that it will have a (virtually) infinite life. Revised costs and revenues (benefits) are given as follows: Capital investment: $23,700,000 Annual operating and maintenance costs: $243,000 Resurface cost every eighth year: $940,000 Structural repair cost, every 18th year: $1,830,000 Revenues (treated as constant, no rate of increase): $3,110,000 MARR remains at 12% per year. Enter your answer in the answer box and then click Check Ans ?