nuity table for discrete compounding when the MARR is 10% per year. new bridge is $1,931,249. new bridge is $1,301,071. new bridge is $1,117,177. new bridge is $2,005,997. new bridge is $2,346,541. COMP

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 9E
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A highway bridge is being considered for replacement. The new bridge would cost SX and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $23,000. People will be charged a toll of $0.29 per car to use the new bridge. Annual car traffic is
estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $8,000 per collector. The existing bridge can be refurbished for $1,400,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $60,000
every five years and regular annual maintenance costs of $21,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge?
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year.
Choose the correct answer below.
O A. The maximum acceptable cost of the new bridge is $1,931,249.
OB. The maximum acceptable cost of the new bridge is $1,301,071.
OC. The maximum acceptable cost of the new bridge is $1,117,177.
O D. The maximum acceptable cost of the new bridge is $2,005,997.
O E. The maximum acceptable cost of the new bridge is $2,346,541.
Transcribed Image Text:A highway bridge is being considered for replacement. The new bridge would cost SX and would last for 20 years. Annual maintenance costs for the new bridge are estimated to be $23,000. People will be charged a toll of $0.29 per car to use the new bridge. Annual car traffic is estimated at 360,000 cars. The cost of collecting the toll consists of annual salaries for five collectors at $8,000 per collector. The existing bridge can be refurbished for $1,400,000 and would need to be replaced in 20 years. There would be additional refurbishing costs of $60,000 every five years and regular annual maintenance costs of $21,000 for the existing bridge. There would be no toll to use the refurbished bridge. If MARR is 10% per year, what is the maximum acceptable cost (X) of the new bridge? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Choose the correct answer below. O A. The maximum acceptable cost of the new bridge is $1,931,249. OB. The maximum acceptable cost of the new bridge is $1,301,071. OC. The maximum acceptable cost of the new bridge is $1,117,177. O D. The maximum acceptable cost of the new bridge is $2,005,997. O E. The maximum acceptable cost of the new bridge is $2,346,541.
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Single Payment
Compound
Amount Present
Factor Worth Factor
To Find F
Given P
FIP
1.1000
1.2100
1.3310
1.4641
1.6105
1.7716
1.9487
2.1436
2.3579
2.5937
2.8531
3.1384
3.4523
3.7975
4.1772
4.5950
5.0545
5.5599
6.1159
6.7275
7.4002
8.1403
8.9543
Discrete Compounding; í= 10%
9.8497
10.8347
To Find P
Given F
PIF
0.9091
0.8264
0.7513
0.6830
0.6209
0.5645
0.5132
0.4665
0.4241
0.3855
0.3505
0.3186
0.2897
0.2633
0.2394
0.2176
0.1978
0.1799
0.1635
0.1486
0.1351
0.1228
0.1117
0.1015
0.0923
Compound
Amount
Factor
To Find F
Given A
FIA
1.0000
2.1000
3.3100
4.6410
6.1051
7.7156
9.4872
11.4359
13.5795
15.9374
18.5312
21.3843
24.5227
27.9750
31.7725
35.9497
40.5447
45.5992
51.1591
57.2750
64.0025
71.4027
79.5430
88.4973
98.3471
Uniform Series
Present
Worth Factor
To Find P
Given A
PIA
0.9091
1.7355
2.4869
3.1699
3.7908
4.3553
4.8684
5.3349
5.7590
6.1446
6.4951
6.8137
7.1034
7.3667
7.6061
7.8237
8.0216
8.2014
8.3649
8.5136
8.6487
8.7715
8.8832
8.9847
9.0770
Sinking
Fund
Factor
To Find A
Given F
A/F
1.0000
0.4762
0.3021
0.2155
0.1638
0.1296
0.1054
0.0874
0.0736
0.0627
0.0540
0.0468
0.0408
0.0357
0.0315
0.0278
0.0247
0.0219
0.0195
0.0175
0.0156
0.0140
0.0126
0.0113
0.0102
Capital
Recovery
Factor
To Find A
Given P
AIP
1.1000
0.5762
0.4021
0.3155
0.2638
0.2296
0.2054
0.1874
0.1736
0.1627
0.1540
0.1468
0.1408
0.1357
0.1315
0.1278
0.1247
0.1219
0.1195
0.1175
0.1156
0.1140
0.1126
0.1113
0.1102
Transcribed Image Text:N12345 879 6 9101123456781920 21 22 23 24 25 Single Payment Compound Amount Present Factor Worth Factor To Find F Given P FIP 1.1000 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 4.5950 5.0545 5.5599 6.1159 6.7275 7.4002 8.1403 8.9543 Discrete Compounding; í= 10% 9.8497 10.8347 To Find P Given F PIF 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 0.1351 0.1228 0.1117 0.1015 0.0923 Compound Amount Factor To Find F Given A FIA 1.0000 2.1000 3.3100 4.6410 6.1051 7.7156 9.4872 11.4359 13.5795 15.9374 18.5312 21.3843 24.5227 27.9750 31.7725 35.9497 40.5447 45.5992 51.1591 57.2750 64.0025 71.4027 79.5430 88.4973 98.3471 Uniform Series Present Worth Factor To Find P Given A PIA 0.9091 1.7355 2.4869 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 6.4951 6.8137 7.1034 7.3667 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 8.6487 8.7715 8.8832 8.9847 9.0770 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4762 0.3021 0.2155 0.1638 0.1296 0.1054 0.0874 0.0736 0.0627 0.0540 0.0468 0.0408 0.0357 0.0315 0.0278 0.0247 0.0219 0.0195 0.0175 0.0156 0.0140 0.0126 0.0113 0.0102 Capital Recovery Factor To Find A Given P AIP 1.1000 0.5762 0.4021 0.3155 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 0.1408 0.1357 0.1315 0.1278 0.1247 0.1219 0.1195 0.1175 0.1156 0.1140 0.1126 0.1113 0.1102
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