Find the present worth and future worth of this project

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Reference no: EM131567259

The municipality of a major city in East of Canada is planning to build a new bridge to decrease the traffic load on the two old bridges connecting both sides of the city across the river. Construction is to start in 2019 and is expected to take four years at the cost of $25 million per year. After construction is completed the cost of the operation and maintenance is expected to be $2.5 million for the firat year, and increase by 2.8% per year thereafter. the scrap/salvage value of the bridge at the end of year 2050 is estimated to be $5 million. Consider the present to be the end of 2017/beginning of 2018 and the interest rate to be 8%.

a) Draw cash flow diagram for this project(from present till end of year 2050)

b) Find the Present Worth of this project.

c) Find the Future Worth of this project.

Reference no: EM131567259

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