Table Q2 gives the costs for two infrastructure alternatives. The study period is 50 years. The...

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Table Q2 gives the costs for two infrastructure alternatives. The study period is 50 years. The MARR is 10% p.a. Table Q2 Annual maintenance costs Alternative Capital cost (*000) Annual user costs (*000) (*000) Uniform S40 p.a. for $1500 S50 in the first year of the study period, growing at 6% p.a. for the the whole period rest of the period $2500 Uniform S25 for the whole period Uniform S15 p.a. for the whole period (a) Express the annual maintenance and user costs of cach altemative as a uniform annual series over the study period. (8 marks) (b) Compare both alternatives using the B/C ratio method. Determine which is the better altemative. (10 marks) (c) When will the balance of the incremental investment of capital in alternative B become zero? Round off to the nearest appropriate whole year. Table Q2 gives the costs for two infrastructure alternatives. The study period is 50 years. The MARR is 10% p.a. Table Q2 Annual maintenance costs Alternative Capital cost (*000) Annual user costs (*000) (*000) Uniform S40 p.a. for $1500 S50 in the first year of the study period, growing at 6% p.a. for the the whole period rest of the period $2500 Uniform S25 for the whole period Uniform S15 p.a. for the whole period (a) Express the annual maintenance and user costs of cach altemative as a uniform annual series over the study period. (8 marks) (b) Compare both alternatives using the B/C ratio method. Determine which is the better altemative. (10 marks) (c) When will the balance of the incremental investment of capital in alternative B become zero? Round off to the nearest appropriate whole year.

Answer rating: 100% (QA)

Hi Solution as follows Part 1 Annual benefits Given Data Study period n 15 years MARR i 6 6100 006 Annual maintenance of Option A 20000 Growing rate 3 3100 003 Annual user cost of Option A 30000 Annua... View the full answer