Two designs on the basis of equivalent worth per mile

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Reference no: EM131307997

A new highway is to be constructed. Design A calls for a concrete pavement costing $90 per foot with a 20-year life; two paved ditches costing $3 per foot each; and three box culverts every mile, each costing $9,000 and having a 20-year life. Annual maintenance will cost $1,800 per mile; the culverts must be cleaned every five years at a cost of $450 each per mile.

Design B calls for a bituminous pavement costing $45 per foot with a 10-year life; two sodded ditches costing $1.50 per foot each; and three pipe culverts every mile, each costing $2,250 and having a 10-year life. The replacement culverts will cost $2,400 each. Annual maintenance will cost $2,700 per mile; the culverts must be cleaned yearly at a cost of $225 each per mile; and the annual ditch maintenance will cost $1.50 per foot per ditch.

Compare the two designs on the basis of equivalent worth per mile for a 20-year period. Find the most economical design on the basis of AW and PW if the MARR is 6% per year. (Note: assuming cleaning also occurs at the end of the life time)

Reference no: EM131307997

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