Compute the present worth you believe to be relevant

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Reference no: EM132015254

A rural stretch of a two-lane road in Loudoun County is to be refurbished or a new route established. The existing road, E, will have a first cost of $3,000,000 to refurbish and the new route, N, will have a first cost of $5,000,000 to build. Annual O&M costs for the County will be $120,000 for E and $90,000 for N. Annual costs for the drivers are estimated to be $880,000 for E and $660,000 for N (In other words Road E is longer and not as efficient for the drivers). The interest rate for the County’s capital programming is 4% compounded annually. Use a Planning Horizon of 20 years and Salvage Values of 60% of first cost. Compute the Present Worth you believe to be relevant.

Reference no: EM132015254

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