Two alternatives will be evaluated to build a new highway. One through the valley bordering the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Two alternatives will be evaluated to build a new highway. One through the valley bordering the river (30 miles) and another across the hills (22 miles). The valley route has an initial cost of $28,500,000. Its annual maintenance cost is $10,000 per mile and involves a major repair every 10 years at a cost of $2,300,000. The hill route costs $38 million and costs $16,000 per mile to maintain and involves a major repair every 15 years at a cost of $3 million. Traffic on both routes will be 6,000 vehicles per day, of which a quarter will be commercial. It will be possible to travel at an average speed of 50 miles per hour. The time cost for a commercial vehicle is $30 per hour and for a regular vehicle it is $10 per hour. The cost per mile is $1.50 per commercial vehicle and $.50 per regular vehicle for the river route. The cost per mile is $1.75 per commercial vehicle and $.60 per regular vehicle for the hill route. Assume a useful life of 30 years and a MARR of 7%. (30pts) Two alternatives will be evaluated to build a new highway. One through the valley bordering the river (30 miles) and another across the hills (22 miles). The valley route has an initial cost of $28,500,000. Its annual maintenance cost is $10,000 per mile and involves a major repair every 10 years at a cost of $2,300,000. The hill route costs $38 million and costs $16,000 per mile to maintain and involves a major repair every 15 years at a cost of $3 million. Traffic on both routes will be 6,000 vehicles per day, of which a quarter will be commercial. It will be possible to travel at an average speed of 50 miles per hour. The time cost for a commercial vehicle is $30 per hour and for a regular vehicle it is $10 per hour. The cost per mile is $1.50 per commercial vehicle and $.50 per regular vehicle for the river route. The cost per mile is $1.75 per commercial vehicle and $.60 per regular vehicle for the hill route. Assume a useful life of 30 years and a MARR of 7%. (30pts)
Expert Answer:
Answer rating: 100% (QA)
Analysis of Highway Alternatives Valley vs Hill Route Project Data Feature Valley Route Hill Route Miles 30 22 Initial Cost 28500000 38000000 Annual M... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
For the following two graphics, provide the specified information below for each. Inverse Demand: P= 43.75 - .00625 Q; MR = 43.75 - 0.0125 Q 25 20 15 $ per unit 10 10 5 0 MC 500 1000 1500 ATC 2000 -...
-
In Exercises, find the limit. lim 5 x 0-x 813 X
-
Tasty, Inc. is a producer of potato chips. A single production process at Tasty yields potato chips as the main product and a by-product (Bits O' Chips) that can be sold as a snack. Both products are...
-
Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 20Y6 (unless otherwise indicated), are as follows: During May,...
-
Define precision and reliability statistically and indicate their meaning in auditing.
-
Selected data taken from a recent years financial statements of trading card company Topps Company, Inc. are as follows (in millions). Net sales ...................$326.7 Current liabilities,...
-
Find y'. y' = y = log(x4 - 5x3 + 2)
-
For each of the following employees, calculate the Social Security tax for the weekly pay period described: For simplicity, all calculations throughout this exercise, both intermediate and final,...
-
n 1 1. lim tantan is equal to 004-1 1+r+r2 2. 3. If the least and the largest real values of a, for which the equation z + a |2-1+21=0(z=C and i=1) has a solution, are p and q respectively, then 4(p...
-
Review Just Running's income statement below. 4 7 5 Category 6 Revenue 8 9 10 11 12 13 14 15 16 17 18 Just Running Income Statement Net sales 23 A Cost of goods sold Operating expenses Selling,...
-
With the assumptions below, create a Proforma and 10 year Discounted Cash Flow model based on the following assumption and answer the questions below. Assume to cost of capital for the equity portion...
-
CMC Plc. is a manufacturing organisation in the construction industry. While there is boom in this line of business, some product portfolios have not been doing well and CMC is no exception. The...
-
You are a clerical worker with an accounting background and a close friend of Chris, who owns a vineyard. Chris produces his own wine every year. You started working for him at the cellar door and...
-
Renegade Clothing is struggling to meet analysts' forecasts. It's early December 2024, and the year-end projections are in. Listed below are the projections for the year ended 2024 and the comparable...
-
Carpal Company manufactures a state of the art device to monitor arthritis. The company received a special order request for a modified device for a different industry where the technology could be...
-
CdF2 (s) Cd+ (aq) + 2 F- (aq) 1. A saturated solution of CdF2 is prepared. The equilibrium in the solution is represented above. In the solution [Cd+] eq = 0.0585 M and [F-] eq = 0.117 M. a....
-
On July 1, 2011, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of the sale called for a down payment of $75,000 and three annual installments of $75,000 due on each...
-
Briefly differentiate between activity-based and time-based allocation methods.
-
At January 1, 2011, NCI Industries, Inc. was indebted to First Federal Bank under a $240,000, 10% unsecured note. The note was signed January 1, 2009, and was due December 31, 2012. Annual interest...
-
Tesco plc is one of the worlds largest food retailers. Fiscal year 2014 (the year ended February 28, 2015) was a rocky year for the retailer. The companys sales and margins had come under pressure as...
-
Exhibit P2 displays a selected set of financial ratios for the years 20152017 of three fashion retailers: USbased Gap, UK-based Next, and Japan-based Uniqlo (Fast Retailing). Using this set of...
-
In 2009, following the worldwide credit crisis, several US-based car manufacturers, such as Chrysler and General Motors, approached bankruptcy and needed to be bailed out by the US government and...
Study smarter with the SolutionInn App