What is the annualized cost of this project

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The Rustin Transportation Planning Board estimates the cost of upgrading a 4-mile section of 4-lane highway from public use to toll road to be $41 million now. Resurfacing and other maintenance will cost $820,000 every 4 years. A toll road would require four toll-takers be on duty 24 hours a day. Toll-takers are paid $11.14 per hour. The Board uses an interest rate of 5% per year for its long term planning.

(a) What is the capitalized cost of this project?

(b) What is the annualized cost of this project?

(c) A traffic study has shown that approximately 18,000 cars will pass through the toll gates each day. How much should the toll per car be (to the nearest $0.05) in order for this project to be self-supporting?

Reference no: EM13734303

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