Question

Problem 12-2 (algorithmic) Question Help part of a new road. An analysis has shown that traffic density on the new road will justify a two-lane bridge at the present time. Because of uncertainty regarding future use of the structed n fhaving to widen the bridge to four lanes at various times in the future are as follows: Probability d. the time at which an extra two lanes will be required is currently being studied. The estimated probabilities Widen Bridge In 0,05 4 years 0.25 5 years 0.35 6 years 0.35 7 years extra $1,800,000 plus $300,000 for The present estimated cost of the two-lane bridge is $2.200.000., If constructed now, the four-lane bridge will cost $3,900,000. The future cost of widening a two lane bridge will be every year that widening is delayed. If money can earn 15 % per year , what would Click the icon to view the interest and annuity table for discrete compoundin the MARR is 15% per year. w thousand. (Round to the nearest whole number.) The PW value for building a four-lane bridge now is $ 2 of 4 (1 complete mic) part of a new lanes will be ause of uncertainty hes in the future ar More Info Discrete Compounding; i 15% Single Payment Uniform Series wo-lane bridge If money can Compound Compound Amount Sinking Capital Recovery Factor dge will be an extra S Amount Present Worth Factor Present Worth Factor Fund Factor est and annuity Factor Factor To Find F To Find P To Find F Given A To Find P To Find A Given F AIF To Find A Given P Given F Given A Given P AIP ane bridge now N FIP PIF FIA PIA 1 1.1500 0.8696 1.0000 0.8696 1.0000 1.1500 2 1.3225 0.7561 2.1500 1.6257 0.4651 0.6151 3 1.5209 0.6575 3.4725 2.2832 0.2880 0.4380 4 1.7490 0.5718 4.9934 2.8550 0.2003 0.3503 5 2.0114 0.4972 6.7424 3.3522 0.1483 0.2983 0.432 8.7537 2.3131 3.7845 0.1142 0.2642 11.0668 4.1604 7 2.6600 0.3759 0.0904 0.2404 0.3269 13.7268 4.4873 0.0729 0.2229 8 3.0590 16.7858 4.7716 0.2096 0.2843 0.0596 3.5179 20.3037 5.0188 0.0493 0.1993 0.2472 4.0456 10 Print Done er box and then Check Clear All

Answer 1

2 lane bridge now Prob Prob*PW Cost PW PW of 2 lane bridge 2200000 1.00 2200000.00 Widen bridge in 4 years 3000000 PW of widen bridge in 4 years 85762.99 1715260 0.05 Widen bridge in 5 years PW of widen bridge in 5 years 3300000 1640683 0.25 410170.81 Widen bridge in 6 years PW of widen bridge in 6 years 3600000 1556379 0.35 544732.77 Widen bridge in 7 years 3900000 PW of widen bridge in 7 years 146 .3 6 Total PW 3753820.62 4 lane bridge now PW 3900000.00 Since expected cost is less for 2 lane bridge, it is better to go for that option