8.11

Using the current specifications, resurfacing a road will cost $1.5 M initially, need $120 K in annual maintenance and need to be resurfaced every 10 years. A proposed new specifications is expected to be more resistant to wear. The resurfacing cost will be $2.1 M with $90K in annual maintenance and resurfacing every 15 years. Develop a choice table for interest rates from 0% to 25%. If the highway department's interest rate is 6%, which specification is preferred