Question: A toll road is being considered as a replacement for the current road linking Purdue and Chicago. Investment costs of the structure are estimated to
A toll road is being considered as a replacement for the current road linking Purdue and Chicago. Investment costs of the structure are estimated to be $20,500,000, and $410,000 per year operating and maintenance costs are anticipated. In addition, the road must be resurfaced every fifth year of its 50-year projected life at a cost of $1,100,000 per occurrence (no resurfacing cost in year 50 and the initial surfacing of the road is included in the $20,500,000). Revenues generated from the toll are anticipated to be $2,000,000. Assuming zero market (salvage) value for the bridge at the end of 50 years and a MARR of 9% per year, what is the conventional B-C ratio for this project
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