What investment can be justified for the new surface

Reference no: EM132158814

Question: Annual maintenance costs for a particular section of highway pavement are $2000. The placement of a new surface would reduce the annual maintenance cost to $500 per year for the first 5 years and to $1000 per year for the next 5 years. After 10 years the annual maintenance would again be $2000. If maintenance costs are the only saving, what investment can be justified for the new surface? Assume interest at 4%.

Reference no: EM132158814

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