Question: Example 7 : A forest Service road will cost $ 9 7 , 0 0 0 . it is estimated that 6 0 % of

Example

7

A forest Service road will cost $

97, 000 .

it is estimated that

60 %

of this will be spent on the right

-

-

way, subgrade, and cuts and fills,

20 %

on wearing surface, and

20 %

on bridges, culverts, and other drainage structures. The right of way and so forth will have a perpetual life, the wearing surface will have a life of

10

years, and the drainage structures will have a life of

20

years. annual maintenance costs will be $

2500 .

If the department of transportation minimum attractive rate of return is

10 % .

What is the estimated annual cost of the road?

Example 7 : A forest Service road will cost $ 9 7

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