Question: Please include all work and explanations! Thank you very much! The Texas DOT is comparing two alternative pavement treatments with the following characteristics. For each

Please include all work and explanations! Thank you very much!

The Texas DOT is comparing two alternative pavement treatments with the following characteristics. For each alternative, estimate the probability to have an annualized construction cost lower than $20k/year. As a result, which alternative would you recommend? The interest rate is 5% per year compounded annually and inflation runs at 2.4% per year. Treatment Construction cost/lane-mile $130k $220k Overlay Reconstruction 6 (15%) 11 (20%) Service Life Years (probability) 7 (25%) 8 (35%) 9 (15%) 12 (25%) 13 (35%) 14 (12%) 10 (10%) 15 (8%)

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