What is the maximum amount that should be spent

Reference no: EM132158735

Question: National Motors must build a bridge to access land for its manufacturing plant expansion. If made of normal steel, the bridge would initially cost $30,000, and it should last 15 years. Maintenance (cleaning and painting) will cost $1000 per year. If more corrosion-resistant steel were used, the annual maintenance cost would be only $100 per year (with the same life). If the firm's cost of money is 12%, what is the maximum amount that should be spent on the corrosion-resistant bridge?

Reference no: EM132158735

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