Determine whether the increased life of the steel bridge

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Two bridge designs have been proposed for the new interstate highway to cross Detroit Michigan to Windsor, Ontario. A bridge constructed from wood will cost $6000 and will last for eight years. Bridge constructed form steel will cost $11,000 and will last for twenty years. Either bridge will have a zero salvage value at the end of its life. Use an interest rate of 8% and determine whether the increased life of the steel bridge justifies the increased cost.

Reference no: EM13548022

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