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Business, 05.02.2020 00:56 aaronolivera200161

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. investment costs of the structure are estimated to be $17,500,000, and $325,000 per year in operating and maintenance costs are anticipated. in addition, the bridge must be resurfaced every fifth year of its 30-year projected life at a cost of $1,250,000 per occurrence (no resurfacing cost in year 30). revenues generated from the toll are anticipated to be $2,500,000 in its first year of operation, with a projected annual rate of increase of 2.25% per year due to the anticipated annual increase in traffic across the bridge. assuming zero market (salvage) value for the bridge at the end of 30 years and marr 10% per year, should the toll bridge be constructed?

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