Question: 5: A road can be paved with either asphalt or concrete. Concrete costs $15,000/km and lasts 20 years. Assume the annual maintenance costs are $900

5: A road can be paved with either asphalt or concrete. Concrete costs $15,000/km and lasts 20 years. Assume the annual maintenance costs are $900 for concrete and $1800 for asphalt per kilometer per year. Use an interest rate of 3% per year and annual analysis to solve for the following:

(a) What is the maximum cost/km that should be spent for asphalt if it lasts only 10 years?

Answer: <7 pts>

Reasoning/Work:

(b) Assume the asphalt road costs $1200 per kilometer. How long must it last to be the preferred alternative?

Answer: <7 pts>

Reasoning/Work:

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